your identity and for other Account related purposes. You represent and warrant to us that the information provided to us by you or on your behalf is true and correct. You understand that we will maintain a record of this information.
4. Separate Agreements
The provisions of this Agreement are in addition to, and not in place of, any separate service or other agreement between us and you covering your use of banking services for the Account. If there is a conflict between the provisions of this Agreement and a separate service or other agreement, the separate service or master agreement controls for that service.
5. Fees and Charges; Finance Charges
You agree to pay fees and other charges in connection with the Account as established by us from time to time. You also agree to pay us our costs and hourly fees for complying with subpoenas or other legal orders and your requests. You authorize us to debit or otherwise deduct the fees and other charges, and costs from the Account, even if it creates an overdraft. We may assess finance charges on any amount due us under this Agreement that is not paid by you within thirty (30) days of receipt of your statement or an invoice showing the amount due.
6. Deposits
Deposits made before the applicable cut-off time on a Business Day are considered made on the day of your deposit.
Deposits made after the applicable cut-off time or on a day which is not a Business Day, are considered made on the next Business Day. All transactions including deposits (even those for which we have provided a receipt) are subject to final verification by us. The amount we credit you for a deposit, regardless of our Funds Availability Policy, is provisional and subject to verification and reversal or adjustment at any time without notice to you if we determine it to be incorrect for any reason.
You agree that we may make adjustments to the Account to reflect the correction of errors at any time.
We reserve the right to (i) refuse to accept deposits or specific Items for deposit; (ii) establish or modify a minimum or maximum balance that may be maintained in the Account; and (iii) limit the number of deposits and Items deposited. We will not be liable to you even if such action causes Items to be dishonored and returned.
We will rely on the account number in a deposit record even if it identifies a party different from the entity named in the record. We are not obligated to identify any inconsistency in identification.
We may from time to time make available night deposit boxes at one or more of our branch locations. Deposits made at a night deposit box will be retrieved and verified by us once at the beginning of each Business Day. Therefore, if you use a night deposit box during the day, the deposit will not be considered received by us until the next Business Day when we retrieve it and process it. You agree that risk of loss of any deposit to a night deposit box does not pass to us until after we have retrieved it and processed it. Our records as to the amount of any deposit to a night deposit box shall be final and binding, and shall be conclusive evidence of the amount of the deposit. The risk of any loss or shortage is expressly assumed by you.
7. Returned or Fraudulent Items
We have the right to charge the Account for the amount of any deposited Item that is returned to us for any reason unpaid, or paid and later returned, or is the subject of a breach of warranty claim, or we have reason to suspect is fraudulent, counterfeit, or invalid for any reason (and reverse or recover any associated interest or earnings credit), even if you have withdrawn any of the funds or an overdraft in the Account is created or increased. This right to charge the Account is not affected by expiration of any applicable midnight deadline. We may also impose a service charge. We may, in our discretion present an unpaid Item for payment again without notice to you. You agree to immediately repay any overdraft caused by any such charge to the Account. #17..
- 1021 -
06/2025 Ver 5.2 Page 3 of 19
8. Acts and Omissions of Other Banks
If you cash or deposit an Item with us, we act as your collecting agent to collect the Item. We will use reasonable care in selecting collection banks, but we are not responsible for errors they make including loss of Items in transit. You have the risk of loss for Items lost, mishandled or destroyed in the collection process. We may charge back or debit the Account (or any other account of yours with us) for, or otherwise obtain a refund of, the amount of any credit we gave you for the deposited Item, if the Item is lost, or destroyed or returned unpaid. You agree to assist us in collecting lost, destroyed or returned Items.
You also understand that we are not responsible for the insolvency or neglect, or any action or failure to act, of any other bank or intermediary in the collection process.
9. Foreign Currencies
Except as provided in any multi-currency agreement or arrangement between us, we may accept deposits in the Account of Items payable in foreign currencies which are convertible to U.S. dollars. We will credit the Account when we receive proceeds in U.S. dollars, and you will bear exchange rate exposure until that time. We will convert foreign currencies to U.S. dollars in accordance with our customary practices. You agree that an Item drawn on a financial institution in a foreign country may be accepted on a collection basis even after we have taken physical possession of such Item, in which case the Funds Availability Policy does not apply to such Items. The actual credit for Items payable in foreign currency will be at the exchange rate in effect at the time of final collection in U.S. dollars and will be net of any fees payable in connection with the currency conversion.
10. Warranties; Remotely Created Checks
For each Item you deposit with us, or which we cash for you or otherwise give consideration, you make the following warranties to us in addition to any other warranties under applicable law: all necessary signatures and endorsements have been placed on the Item and are authorized and genuine, the Item has not been materially altered, you have good title to the Item, and no defense of any party to the Item is good against you. If any such warranty is breached, we may deduct the amount of the Item from the Account or otherwise collect from you this amount plus our related fees and expenses.
You agree not to deposit a remotely created check (i.e. a check that is not created by the paying bank and that does not bear a signature applied, or purported to be applied, by the person on whose account the check is drawn) into the Account. We reserve the right to reject remotely created checks from any deposit and reduce the amount of the deposit accordingly or post debit adjustments for the value of any remotely created checks. If you nevertheless deposit a remotely created check and we accept such remotely created check for deposit, you warrant and guarantee that the person on whose account the remotely created check is drawn authorized the issuance of the check in the amount stated on the check and to the payee stated on the check. If any such warranty is breached, we may deduct the amount of the Item from the Account or otherwise collect from you this amount plus our related fees and expenses. You agree to maintain, at our request, a balance in a non-interest bearing account with us in the amount we determine based on a percentage of the amount of remotely created checks you deposit and the return history of such deposits. You further agree to maintain such balance in such account for a period of at least ninety (90) days after the date of the last remotely created check deposited prior to closure of the Account to pay us for any amounts due hereunder.
11. Funds Availability Policy
Funds from your deposits will be available for withdrawal as provided in our Funds Availability Policy which is a part of, and included with, this Agreement. The Funds Availability Policy may change from time to time without prior notice to you.
12. Check Endorsement Requirements
Our Funds Availability Policy also describes our check endorsement requirements. You agree to abide by our endorsement #17..
- 1022 -
06/2025 Ver 5.2 Page 4 of 19
requirements and agree that we have no responsibility for your failure to comply with our endorsement requirements. You agree to indemnify us for and defend and hold us harmless from and against any and all actions, losses, damages, claims, demands, liabilities, costs, or expenses, including court costs and reasonable attorneys’ fees and expenses (collectively, “Claims”), we may suffer as a direct or indirect result of your failure to comply with our endorsement requirements. You understand that we may refuse to accept Items not properly endorsed by you. We may, however, supply a missing endorsement on an Item we accept for deposit or cash.
13. Funds Transfers
The following terms and conditions are in addition to and do not replace any other agreements that we have with you governing electronic transfers.
(a) System Rules. Except to the extent conflicting with this Agreement (in which event this Agreement will control to the extent legally permitted), funds transfers (payment orders and ACH entries) to or from the Account are subject to the rules then in effect for the funds transfer system through which the transfers are made, including, for ACH transactions, the rules of NACHA – The Electronic Payments Association®, and for transfers through the funds transfer system of the Federal Reserve Banks, the applicable laws and regulations of the Board of Governors of the Federal Reserve System and related operating circulars. (b) Credits. Unless we have otherwise agreed in writing, the periodic statements we provide will notify you of funds transfer payments and credits received by us for credit to the Account. All credits to the Account for funds transfers that we receive are provisional until we receive final settlement for the funds except where otherwise required by applicable law or rule. If we do not receive final settlement, you agree that we are entitled to a refund (through reversal debit or otherwise) of the amount credited to the Account for that transfer, together with any associated interest or credit. We have the right to charge the Account for the amount of any funds transfer credit that we have reason to suspect is fraudulent, erroneous, or invalid for any other reason (and reverse or recover any associated interest or earnings credit), even if you have withdrawn any of the funds or an overdraft in the Account is created or increased. You agree to immediately repay any overdraft caused by any such charge to the Account.
(c) Transfers. You are responsible for the contents of each funds transfer instruction and entry sent to us by you or on your behalf. In the absence of specific written instruction, we will choose the funds transfer system and intermediary banks, as necessary to complete your funds transfer. You acknowledge and agree that we and any bank or intermediary are entitled to rely on the account number and bank identification number which appear on any payment order issued by you or on your behalf, without any obligation to look at the name of the receiving customer or bank which may also appear on the payment order. (d) ACH. You authorize us to debit or credit the Account for ACH entries to or from the Account. ACH entries must be transmitted to us in accordance with the applicable rules and our policies and procedures. You are responsible for all entries authorized by you and entries transmitted to, and accepted by, us in accordance with the ACH procedures, including the security procedures.
14. Dates and Instructions
You agree not to issue or present incomplete, post-dated or conditional Items. You agree that we may, without inquiry or liability, accept or pay an Item drawn on the Account even though (a) it is received prior to the date of the Item or contrary to special instructions identified on the Item (whether or not we are aware of such date or special instructions), or (b) the Item is undated or the date on the Item is more than six months old. If you do not want us to honor an Item, you must give us a stop payment order.
#17..
- 1023 -
06/2025 Ver 5.2 Page 5 of 19
15. Payment of Items
The order in which you make withdrawals from the Account will not necessarily be the same as the order in which we post these transactions to the Account, and this posting order may affect whether you incur service fees and costs associated with overdrafts, as set forth in Section 17 below. You have no right to tell us the order to use when posting Items or other transactions to the Account.
The Account may be debited on the day an Item is presented by any means, including, for example, electronically, or at an earlier time based on notification we receive that an Item drawn on the Account has been presented for payment or collection.
At the end of each Business Day, we will process and post transactions to the Account in the following order, by category and within each category:
(a) Credits - Any deposits and other credits we receive, prior to the identified cutoff times, will be posted to the Account Credits for interest will be handled in accordance with category (e) below. (b) Certain Other Debits - Outgoing wires, most internal transfers to other Accounts with us, transfers to other accounts initiated through our Online Banking for Business service, cash withdrawals, and checks which were cashed by us, will be processed based on the amount of the transaction, from lowest to highest. (c) ACH transactions – All ACH transactions will be processed based on the amount of the transaction from lowest to highest. If you use a check which is electronically converted by the payee, it will be processed as an ACH transaction. (d) Checks – All check transactions will be processed based on the number of the check, from lowest to highest, regardless of the date on which the check was originally written or the amount of the check. This includes checks created through a bill payment service, which may have a number that is not in sequence with other checks you write from your checkbook. If a check number is not available, all numbered checks will be processed first, any remaining checks will be processed based on the amount of the check, from lowest to highest. (e) Bank generated transactions – such as fees that are owed to us and interest credits will generally be processed as they occur.
The description of the Items above is intended to be representative of the most common types of transactions within each category. Other Items may be debited from the Account even though not specifically listed above.
We may, as a condition of withdrawal, require you to provide identification or information acceptable to us.
16. Checks Presented Over the Counter
If a check you have written is presented to us “over-the-counter” by someone who is not our customer, we may require proper identification and may charge a fee. We may dishonor the check if the person refuses to pay the required fee or provide proper identification.
17. Overdrafts/Insufficient Funds
You agree to limit all withdrawals and transfers from the Account to the amount of the Available Balance in the Account at the time the withdrawal or transfer is made or initiated. We may, at our option and without notice to you, pay or refuse to pay Items, and may accept or reject payment orders if there is or would be an insufficient Available Balance in the Account without #17..
- 1024 -
06/2025 Ver 5.2 Page 6 of 19
regard to whether we may have previously honored Items or accepted payment orders in similar circumstances. If we honor an Item or accept the payment order and create an overdraft, you agree to be liable for, and immediately repay any Account deficit resulting from, charges or overdrafts to the Account, however arising, together with our service fee and the costs we incur to collect the deficit, including, to the extent not prohibited by law, our reasonable attorneys’ fees. We may also place a hold for the amount of the overdraft on the Account. We may, without notice to you, refuse to pay Items, honor payment orders or permit withdrawals against uncollected funds.
18. Check and Form Specifications
All checks, withdrawal forms, deposit slips, and other forms used in connection with the Account must be on forms obtained from us or approved by us. You agree that we may refuse to accept for deposit or process any forms presented in a form that cannot be processed on equipment used in our normal business operations.
19. Signature Requirements; Forgeries and Alterations
You understand that we process Items using high speed automated equipment based on information encoded on such Items, and we are not required to examine each Item drawn against the Account for dates, signatures, legends, or indorsements. You agree that we will have no liability to you for failing to detect a forged or missing signature on, or an alteration of, an Item provided that we exercise ordinary care in the processing of such Item, and you agree that our use of electronic processing and automated payment of Items without manual verification of signature, or other examination, is a procedure that does not vary unreasonably from general banking usage and constitutes ordinary care by us in processing Items. We may collect your signature in connection with the opening or maintenance of the Account, but this does not create any responsibility on our part to verify signatures on Items and other charges to the Account.
We will have no responsibility for reviewing the number or combination of signatures on an Item drawn against the Account. Even if you have indicated that more than one signature is required in connection with an Item drawn on the Account, whether on the Item itself or otherwise, or there are two or more lines on an Item for signature, these are solely for your internal control purposes and are not binding on us, and you authorize us to honor or pay an Item or transaction through the Account contrary to the signature requirements you have specified.
20. Facsimile or Mechanical Signatures/Automatic Check Writing Device You agree that if you use a facsimile or other mechanical signature (including a stamp) to sign or indorse Items, or if you use a computer or other device to create and/or sign or indorse Items you have the sole responsibility for securing such device and the entire risk of unauthorized use, and we may conclusively rely on that signature as your authorized signature without regard to when, by whom, or by what means such signature may have been made or affixed to an Item. If you use a facsimile or other mechanical signature (including a stamp) to sign or indorse Items, or if you use a computer or other device to create and/or sign or indorse Items, we may also conclusively treat as authorized any signature that reasonably resembles your facsimile or mechanical signature whether such indorsement was affixed by you or by someone having no authority to supply your indorsement.
21. Protection Against Unauthorized Items, etc.
You acknowledge that the Account is susceptible to losses from unauthorized, altered, or counterfeit Items and other types of fraud. We offer a variety of products and services, such as “positive pay” and account blocks and filters, designed to detect and deter fraud. If you decline to use or fail to implement any of these products and services, or you fail to follow the procedures necessary for proper use of these products or services, or you fail to follow other precautions reasonable for your particular circumstances, you understand that there is a substantially greater risk of loss from fraud, and you agree that (a) you will be #17..
- 1025 -
06/2025 Ver 5.2 Page 7 of 19
treated as having assumed the risk of those losses, (b) you will be precluded from asserting any claims against us for paying any unauthorized, altered, counterfeit or other fraudulent Item that such product, service, or precaution was designed to detect or deter, and (c) we will not be required to re-credit the Account or otherwise have any liability for paying such Items.
22. Internal Controls
You acknowledge that you share responsibility for preventing the fraudulent or unauthorized use of the Account. You agree to institute and maintain reasonable and effective procedures to ensure the security of your checks and check stock, access to the Account, and your internal procedures.
23. Lost Checks or Devices
You agree to notify us promptly, both orally and in writing, at the telephone number and address listed on your statement, of any suspected loss, theft, or unauthorized use of your checks or any card, code, or device permitting access to, or evidencing the Account. Until we have a reasonable opportunity to act on such notice, we may maintain debits and honor transactions effected on the Account (except as otherwise provided by law) through the use of any such checks, card, code or device. We may close the Account, permit withdrawals by you, or issue new evidence of an Account on such conditions as we may require.
24. Stop Payment Orders
You may instruct us to stop payment on a check that has not been paid. We will not have a duty to stop payment until you have given us all of the information that we require, including the proper Account name, Account number, check number and date, the payee and the amount of the check, and we have had a reasonable opportunity to take action prior to us paying, accepting, cashing, certifying or otherwise acting with respect to, or becoming obligated on, the check. We reserve the right to require additional information. All of the required information must be correct for the stop order to be effective. A written order is effective for twelve months unless we agree in writing to a different period. A stop payment order may be renewed for additional periods as permitted by our procedures and policies then in effect (subject to an overall maximum of six years) by submitting a written request with the required information prior to expiration of the then-effective stop payment order. An oral order is effective for no more than 14 days, unless confirmed by you in writing within that period. We may pay a check after the stop payment order expires or if required by law. Stop payment orders received after regular banking hours (or a later time as specified by us for a particular service) or on a day which is not a Business Day are deemed received at the opening of business on the next Business Day. If you have preauthorized us to make payments out of an Account, stop payment orders must be received by us at least three Business Days before the payment is scheduled to be made. You may not issue stop payment orders for cashiers checks, certified checks, or other bank obligations. By placing a stop payment order, you agree to indemnify us for and defend and hold us harmless from and against any and all Claims incurred by us due to our refusal to pay the Item.
You also agree to pay our fees for stop payment orders.
25. Interest
Except with respect to CDs as described in Section 35 or as otherwise agreed to by us in writing, interest-bearing accounts will bear interest at annual rates that we may establish and change from time to time in our discretion and that are calculated and compounded by such methods as we may establish and change from time to time in our discretion. The interest rate may be dependent upon the balance in the Account. Unless governing law or regulations specify otherwise, we reserve the right to pay interest only on Available Balances, not to pay interest on an Account open for less than 90 days or an inactive Account, and not to pay interest accrued but not credited at the time an Account closes. We will not pay interest on an Account that does not meet eligibility requirements established by law.
#17..
- 1026 -
06/2025 Ver 5.2 Page 8 of 19
26. Checking Subaccounts
For various accounting purposes, the Account (and, for eligible customers, your NOW account) may consist of two subaccounts: a transaction sub account and a money market sub-account. The account will still be treated as a single account for most other purposes including determining any fees, charges, earnings credits, interest calculations and Available Balances and for information reporting and statement purposes. All deposits or credits to the account will be credited to your transaction sub-account, and all of your checks, transfers, withdrawals and other debits (collectively, “Debits”) will be deducted from your transaction sub-account. Balances above a threshold level set by us are periodically transferred into your money market subaccount. As funds in your money market sub-account are needed to pay Debits and maintain the threshold balance, they are transferred back to your transaction sub-account. Transfers to your transaction sub-account will be made up to the maximum number of times per period permitted for MMDAs hereunder. The last permitted transfer will include the transfer of the entire balance of your money market sub-account into your transaction sub-account. We set the threshold balance and may change it at any time in our discretion. Generally, we will allow withdrawals from your money market sub-account at any time without prior notice from you. However, in accordance with Federal Regulation D, we reserve the right to require at least seven (7) calendar days’ prior notice that a withdrawal is going to be made.
27. Statements and Notices; Responsibility
(a) General. At your election, we will either provide to you electronically through our Online Banking for Business service (the “Website”) or by mail at your current address in our files periodic statements (“Statements”), notices and other information regarding the Account (“Regulatory Disclosures”). In either case, we may assess charges for such service, as determined by us from time to time. You acknowledge that you are in the best position to discover the payment of an Item charged to the Account which is unauthorized (e.g., because of a forgery, alteration, or unauthorized or missing signature) or altered, as well as erroneous charges, debits, or other entries to the Account (collectively, “errors”). You agree to promptly examine each statement, record, notice, canceled check and other Items provided or made available to you (whether originals, images, copies or in other formats) and to promptly notify us of any error or problem. You must notify us of a forged or unauthorized signature, alteration, any other error or account problem, including an erroneous statement entry, unauthorized or missing indorsement, discrepancy or improper charge or entry, within a reasonable time under the circumstances (not to exceed 14 days) after we send or otherwise make available to you your statement, your checks (whether originals, images, copies or in other formats), or information identifying the transactions or indicating the error or problem. Such notifications are to be made by calling us or writing to us at the telephone number or address listed on your statement. If you fail to notify us promptly within the timeframes described above, we will not be obligated to re-credit or refund the amount of the error or account problem and you will be precluded from asserting the error or account problem against us. If you make a claim for an error or problem, you agree to cooperate with us as we may request (including providing an appropriate affidavit) in the investigation of the situation and any effort by us to recover funds on your or our behalf. (b) Consent to Electronic Statements. If you elect to receive Statements and Regulatory Disclosures electronically through the Website pursuant to Section 27(a) above, you hereby consent to the receipt of such Statements and Regulatory Disclosures electronically in lieu of paper Statements; provided, however, we may provide paper Statements at any time.
(c) Unencrypted Email Communication. You recognize that unencrypted messages, including email, are not secure. If you choose to communicate with us by email, you acknowledge that we may rely on the contents of the email as having been authorized by you, if we accept and act on it in good faith. You agree that we may reply to you in an email with the requested information. You assume the entire risk for unencrypted electronic communications. #17..
- 1027 -
06/2025 Ver 5.2 Page 9 of 19
28. Indemnity and Limitations
IN NO EVENT UNDER ANY THEORY SHALL WE OR ANY OF OUR AFFILIATES, OR ANY OF OUR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, OR SERVICE PROVIDERS, HAVE ANY LIABILITY TO YOU OR ANY OTHER PERSON OR COMPANY FOR ANY
CLAIM OR DAMAGE OF ANY KIND (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF, OR RELATING TO, OUR
PROVIDING THE ACCOUNT OR ANY SERVICES RELATED TO THE ACCOUNT, EXCEPT TO THE EXTENT THAT SUCH CLAIMS OR DAMAGES ARE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH SECTION 46 OR A COURT OF COMPETENT
JURISDICTION BY A FINAL AND NON-APPEALABLE JUDGMENT TO HAVE RESULTED FROM OUR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED THAT IN NO EVENT SHALL WE OR ANY OF OUR AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES OR
AGENTS HAVE ANY LIABILITY TO YOU OR ANY PERSON OR COMPANY FOR INDIRECT LOSSES, SPECIAL, CONSEQUENTIAL,
INCIDENTAL, OR PUNITIVE DAMAGES, OR DAMAGES FOR LOST BUSINESS, PROFITS OR REVENUE, GOODWILL, OR ANTICIPATED SAVINGS, EVEN IF WE ARE AWARE OF THE POSSIBILITY OF, OR COULD REASONABLY FORESEE, SUCH DAMAGES.
To the extent that provisions of applicable law prohibit an agreement to disclaim a bank’s responsibility for its failure to exercise ordinary care, our responsibility to you under this Agreement is limited to the exercise of ordinary care in providing the Account and any services related to the Account. Our ordinary care is to be evaluated based on reasonable commercial banking standards prevailing in our industry and location for similarly situated commercial banks.
You agree to indemnify us and our affiliates and each of our respective directors, officers, employees, agents, and service providers (the “Indemnified Parties”) from, and defend and hold harmless each of the Indemnified Parties from and against, any and all Claims directly or indirectly arising out of or relating to our providing the Account or services related to the Account (including, without limitation, any and all Claims in connection with complying with or responding to subpoenas, summonses, search warrants, or requests or demands from government agencies), except to the extent that such Claims are determined by binding arbitration in accordance with Section 46 or a court of competent jurisdiction by a final and non-appealable judgment to have resulted from our gross negligence or willful misconduct.
29. Transfer and Assignment Restrictions
You are prohibited from transferring or assigning your rights to, or granting a security interest in, the Account without our prior written consent. You agree to indemnify us for and defend and hold us harmless from and against all claims, losses, liabilities and expenses incurred by us if you transfer, assign or grant a security interest in the Account (whether or not we consented to such security interest). Any assignment or pledge of the Account is subject to our prior security interest and right of set-off.
30. Privacy and Disclosure of Information
We protect the confidentiality of your financial information. We do not disclose information about the Account or transactions in the Account except as follows: (a) to third parties where it is necessary for completing transfers or tracing transactions, or resolving errors or claims; (b) to credit bureaus or to verify or disclose the existence, amount, or condition #17..
- 1028 -
06/2025 Ver 5.2 Page 10 of 19
of the Account for third parties, such as merchants, or other financial institutions; (c) pursuant to court orders and other legal process; (d) in connection with examinations by banking authorities or to comply with subpoenas, summonses, search warrants, or requests from government agencies; (e) to companies affiliated with us; (f) to companies who provide services to us, such as check printers and data processors; (g) in connection with any litigation involving, or the enforcement of our rights and remedies under or in connection with, this Agreement or any other agreement between us; (h) whenever required by law, regulation, or rules, including, where applicable, the rules of NACHA – The Electronic Payments Association® or other funds transfer systems used in connection with a funds transfer; (i) as permitted under any other agreement between you and us; and (j) with your consent.
31. No Internet Gambling Transactions
We are subject to the Unlawful Internet Gambling Enforcement Act (the “UIGEA”). You represent and warrant and agree that you are not engaged in the business of betting or wagering (as such terms are defined in the UIGEA). You acknowledge and agree that this Account will be subject to closure in the event that you, at any time, engage in the business of betting or wagering.
32. Termination
We reserve the right to close the Account, with or without cause, at any time. You may, at any time, close the Account after we have received written notice and have had a reasonable opportunity to act on it. The existence of a zero balance in the Account does not itself terminate the Account. Our rights under this Agreement will survive the closing or termination of the Account.
33. Pre-Authorized Debits for Loan Payments
Unless other arrangements for loan payments have been agreed upon in writing, you authorize us to charge to the Account any unpaid amounts or other extensions of credit which may be outstanding at any time. We will attempt to give you notice prior to debiting the Account, but we are not obligated to do so.
34. Provisions for our Corporate Money Market Deposit Account (“MMDA”) (a) Interest Earnings. The daily Collected Balance in the MMDA will earn interest as described in Section 25. However, no interest will accrue for any day on which the daily Collected Balance falls below our minimum balance requirement for this type of account. If the average daily Collected Balance for a statement month falls below the minimum, no interest will accrue for that month. “Collected Balance” means the total of currency deposits made to the MMDA plus the total amount of checks and other Items deposited which have become available to you according to our Funds Availability Policy, plus all interest credited to the Account minus all withdrawals and other debits charged to the MMDA. This balance is calculated daily and is applied to the posted interest rate for that day. Accrued daily interest earnings will be credited to the MMDA on the last day of the month.
(b) Deposits. After opening the MMDA with the minimum initial deposit, you can make additional deposits at any time.
Generally, your additional deposit may be in any amount, but we reserve the right to refuse or limit the amount of additional deposits to the MMDA.
(c) Withdrawals. We may, at our option, limit you to no more than a combined total of six (6) transfers and withdrawals from an MMDA per month, or monthly statement period or cycle, to another account of yours with us or to a third party, by means of a preauthorized or automatic transfer, telephonic, facsimile, or computer generated order or #17..
- 1029 -
06/2025 Ver 5.2 Page 11 of 19
instruction, or check, draft, debit card, or other similar order made payable to a third party. The following transfers would not be subject to, or included in, such six (6) transfer or withdrawal limitation: (i) transfers from an MMDA to repay loans originated or serviced by us and associated expenses, (ii) transfers from an MMDA to another Account, and (iii) withdrawals from an MMDA, in each case when such transfers or withdrawals are made by mail, messenger, ATM, or in person or when such withdrawals are made by telephone via a check mailed to you.
We may, at our option, decline any withdrawal or transfer that exceeds these limits or we may charge a fee for any withdrawal that exceeds these limits. If you exceed these withdrawal limitations, we reserve the right to change the MMDA to another type of deposit account that pays a lower rate of interest or no interest, but has more flexible withdrawal capabilities, or we may close the Account.
(d) Notice of Withdrawal. Generally, we will allow withdrawals from the MMDA at any time without prior notice. However, in accordance with Federal Regulation D, we reserve the right to require at least seven (7) calendar days’ prior written notice that a withdrawal is going to be made.
(e) Closing. Either you or we may close the MMDA at any time. The MMDA may continue to earn interest upon closing. Any accrued interest may be credited to the Account.
35. Certificate of Deposit (Time Deposit) Accounts
This section applies to certificate of deposit (time deposit) Accounts (“CDs”). If there are any conflicts between the provisions of this section and any other provisions of this Agreement insofar as they relate to CDs, the provisions of this section shall control.
We will provide you with a Certificate of Deposit Account Disclosure describing certain specific terms and conditions of each CD, such as the maturity date, interest rate, interest payment terms, interest computation method, renewal provisions, and early withdrawal terms, including any applicable early withdrawal fees. Unless otherwise provided in the Certificate of Deposit Account Disclosure, the rate of interest paid, interest computation method, renewal provisions, and early withdrawal terms of the CD will not change during its term. CDs are not eligible for check transactions or funds transfer and other treasury management services. Periodic statements will not be provided for CDs.
36. Security Interest; Set-off
(a) Security Interest. You grant us and each of our Affiliates a first priority security interest in all Accounts owned by you, now or in the future, with us or any of our Affiliates, to secure payment of any or all obligations (including for service fees and charges) you may have to us or any of our Affiliates, whether direct or indirect, absolute or contingent, due or to become due, whether now existing or hereafter arising, and whether several, joint or joint and several, regardless of whether another party is also liable for such obligations or such obligations relate to the Account, a credit agreement, or other circumstances. For purposes of this Agreement, “Affiliate” means any corporation, limited liability company, or other legal entity that controls, is controlled by, or is under common control with another legal entity. (b) Set Off. In addition to our rights under this Agreement or otherwise, we and each of our Affiliates may exercise the right of set-off against any or all of your Accounts and deposits except as prohibited by applicable law. If you have any obligation to us or any of our Affiliates, under this Agreement or otherwise, whether or not then due, we can use the funds or balances from any Account you have with us or any of our Affiliates to pay or satisfy the obligation or may set off against any amount we owe you in order to obtain payment of such obligation. Except as may be restricted by applicable law, this right may be exercised at any time and without prior notice, regardless of whether it creates an overdraft or results in subsequent dishonor of checks or request to transfer funds. If the law imposes conditions or #17..
- 1030 -
06/2025 Ver 5.2 Page 12 of 19
limits on our ability to take or setoff funds in your Accounts, to the extent that you may do so by contract, you waive those conditions and limits and you authorize us to apply funds in any or all of your Accounts to obligations you owe us or our Affiliates.
(c) Claims on the Account. You also grant us the right to terminate or place a hold on, and dishonor all Items drawn on the Account that you have assigned or in which you have granted a security interest to any third party (whether or not we consented to such security interest). Upon receipt of oral or written notice from any party of a claim regarding the Account, we may place a hold on the Account. You agree to indemnify us for and defend and hold us harmless from and against our failure or refusal to honor any Item drawn on a pledged or encumbered Account or any other withdrawal instruction.
37. Legal Process
We may comply with any writ of attachment, adverse claim, execution, judgment, garnishment, tax levy, citation to discover assets, turnover or restraining order, subpoena, warrant or other legal process, however served or made which we believe to be valid. Any such legal process is subject to our security interest and rights of set-off. We may, in our sole discretion, respond to legal process by placing a hold on funds in the Account subject to such legal process, close the Account, or interplead the funds. You agree to pay us all of our fees and expenses, including reasonable attorneys’ fees in responding to any such legal process, which fees and expenses may be charged against the Account even if an overdraft is created. We may also create a hold on the Account in anticipation of such fees and expenses. We will have no liability for complying with such legal process, or if there are insufficient funds available in or another restriction on the Account because of actions we take in response to such legal process. We may also place a hold on the Account and conduct an investigation if we suspect there to be fraud or illegal activity associated with the Account.
38. Accounts That May Be Eligible for Pass-Through Deposit Insurance This section applies as of the compliance date of the FDIC’s Rules and Regulations for Recordkeeping for Timely Deposit Insurance Information, 21 CFR Part 370. If you have opened an Account on behalf of the beneficial owner(s) of the funds in the Account (for example as an agent, nominee, guardian, executor, custodian or in some other capacity for the benefit of others), the Account may be eligible for “pass-through” deposit insurance from the FDIC. This means the Account could qualify for more than the standard maximum deposit insurance amount. For such Accounts, in order for us to comply with §370.5(a) of the FDIC’s Rules and Regulations, if the Account has transactional features (such as check writing capability and/or the use of Debit Cards) as defined in § 370.2(j) of the FDIC’s Rules and Regulations, you must agree to provide a record of the interests of the beneficial owner(s) in accordance with the FDIC’s requirements as specified below. Following these procedures may minimize the delay that these beneficial owner(s) may face when accessing their FDIC-insured funds in the event of a bank failure.
Section 370 of the FDIC’s Rules and Regulations can be accessed on the FDIC’s website at https://www.fdic.gov/regulations/laws/rules/2000-9200.html.
The FDIC has published a guide that describes the process to follow and the information you will need to provide in the event the bank fails. In addition, the FDIC has published an addendum as section VIII of the guide (the “Addendum”), which is a good resource to understand the FDIC’s alternative recordkeeping requirements for pass-through deposit insurance. The Addendum sets forth the FDIC’s expectations for demonstrating eligibility for pass-through deposit insurance coverage for deposit accounts, including those with transactional features. The Addendum also describes the records you should keep on the beneficial owner(s) of the funds and the format in which to provide the records to the FDIC in the event the bank fails. The Addendum can be accessed on the FDIC’s website at https://www.fdic.gov/deposit/deposits/brokers/part-370- appendix.html. #17..
- 1031 -
06/2025 Ver 5.2 Page 13 of 19
You agree to cooperate fully with us and the FDIC in connection with determining the insured status of funds in the Account at any time. In the event the bank fails and the FDIC is appointed as its receiver, you agree to provide the FDIC with the information described above in the required format within 24 hours of bank failure for all Accounts with transactional features and any other Accounts to which you need rapid access. As soon as the FDIC is appointed, a hold or freeze may be placed on the Account so that the FDIC can conduct the deposit insurance determination. That hold or freeze will not be released until the FDIC obtains the information required to enable the FDIC to calculate the deposit insurance. You understand and agree that your failure to provide the required information to the FDIC may result in a delay in receipt of insured funds by the beneficial owner(s) and legal claims against you from the beneficial owner(s). This Agreement survives after the FDIC is appointed as our receiver, and as a result, the FDIC shall be entitled to enforce the terms of this section.
39. Governing Law
This Agreement, the Account, and transactions in the Account are subject to the laws and regulations of the United States and of the State of California, and applicable rules and regulations. To the extent any such laws, rules or regulations may be modified or supplemented by agreement of the parties and the provisions of this Agreement or any other agreement or document applicable to the Account or transactions have done so, you and we agree to such modifications and supplements. To the extent any term or condition in this Agreement is inconsistent with such laws, rules or regulations it will be deemed modified and applied in a manner consistent with such laws, rules or regulations.
40. Certain Instructions
If you ask us to follow instructions which we believe expose us to potential liability or claims, we may refuse to follow your instructions, or we may require a surety bond or other protections satisfactory to us, such as your indemnity, before we follow the instructions.
41. Inactive Accounts
If an Account has had no withdrawal or deposit activity, and we have had no contact from you regarding the Account for eighteen (18) months, we may consider the Account inactive and stop sending Account statements. Service fees and other terms applicable to active accounts will apply to the Account while it is inactive except where prohibited by law. An inactive Account may be subject to additional fees. You understand that under state abandoned property laws, we must turn over to the state the Account if it has been inactive for a specified period of time as prescribed by applicable law.
42. Relationship
The relationship created by any deposit is that of debtor and creditor and otherwise the relationship between us is that of independent contractor. No fiduciary or other special relationship exists except as required by law.
43. Recording
You authorize us to monitor, record, and retain telephone calls, electronic messages and other data transmissions at any time without notice for any reason including to provide a record of instructions with respect to the Account, but we are not obligated to do so.
44. Miscellaneous
#17..
- 1032 -
06/2025 Ver 5.2 Page 14 of 19
If any provision of this Agreement is determined to be invalid, illegal, or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions of this Agreement will not be affected or impaired as a result. We may waive any provision of this Agreement, but the waiver will apply only to that provision and on that occasion. In no event is any waiver or series of waivers to be construed as creating or requiring a waiver of any provision in the future.
45. Facsimilies and Email
We may, in our discretion, accept facsimiles of Account documentation and related matters as originals. Email communications from you, including instructions, are not binding on us and do not constitute notice to us as contemplated by this Agreement unless we otherwise expressly agree in writing.
46. Claims Subject to Arbitration
We and you agree to arbitrate all disputes or claims between you and us arising out of or relating in any way to the Account or this Agreement, any other agreement related to the Account, or any transactions arising hereunder or thereunder, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory. This arbitration provision is intended to be broadly interpreted and to cover, without limitation, any claims that arose before the effective date of this Agreement or any prior agreement governing the Account (including, but not limited to, claims relating to advertising, promotions, or disclosures) and any claims that may arise after the termination of this Agreement.
This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act, 9 U.S.C. § 1 et. seq., governs the interpretation and enforcement of this provision. An American Arbitration Association (“AAA”) arbitrator will decide the substance of all Claims in accordance with all applicable law, including recognized principles of equity and statutes of limitations, and will honor all claims of privilege recognized by law.
Unless both you and we agree otherwise, each party must bring all related or similar Claims in a single arbitration proceeding. If you or we later initiate a subsequent arbitration asserting Claims that are related or similar to ones that were raised by such party in an earlier-filed arbitration, the AAA or the arbitrator will either: (i) consolidate the subsequent arbitration with the earlier proceeding if it is ongoing or (ii) dismiss the subsequent arbitration if it raises Claims that would be barred by applicable law if brought in court.
(a) Notice of Dispute and Arbitration Procedures. A party who intends to pursue a Claim must first send to the other a letter describing the Claim and containing the information described below (a “Notice of Dispute”). Any Notice of Dispute sent to us should be addressed to:
BMO Bank N.A.
Documentation Analysis and Control
320 South Canal Street 14W
Chicago, IL 60606
Any Notice of Dispute sent to you by us will be sent to the address in our records that is associated with the Account at the time the Notice of Dispute is sent. The Notice of Dispute must (a) describe the nature and basis of the Claim; (b) set forth the specific relief sought; (c) set forth the name and address of the claimant; and (d) include the Account numbers and/or the provision of the applicable agreement to which the Claim relates. If we and you do not reach an agreement to resolve the Claim described in the Notice of Dispute within forty-five (45) days after the Notice of Dispute is received, you or we may commence an arbitration proceeding with AAA. If you or we attempt to commence arbitration proceedings before providing the requisite Notice of Dispute, the other party may inform the AAA of this agreement and direct it to refrain from commencing administration of arbitration proceedings until the requisite time period for notice has passed. Neither you nor we will disclose to the arbitrator the existence, amount, or terms of any settlement offers made by either party until after the arbitrator issues a final award resolving the Claim. #17..
- 1033 -
06/2025 Ver 5.2 Page 15 of 19
The arbitration will be governed by the AAA’s Commercial Dispute Resolution Procedures, as amended from time to time (the “AAA Rules”) as modified by this Agreement, and will be administered by the AAA.
The arbitrator is bound by the terms of this Agreement. All issues are for the arbitrator to decide, except that issues relating to the arbitrability of Claims or the scope, and enforceability of this arbitration provision, including the interpretation of the prohibition of class and representative actions and non-individualized relief, are for the court to decide. The right to a hearing will be determined by the AAA Rules. Any in-person arbitration hearing will take place in Chicago, Illinois. Regardless of the manner in which the arbitration is conducted, the arbitrator, upon the request of either party made prior to the closing of the hearing (or, if there is no oral hearing, prior to or along with submission of final documents to the AAA), will issue a reasoned written decision sufficient to explain the essential findings and conclusions on which the award, if any, is based. Unless otherwise agreed by you and us, any award will be rendered by the arbitrator not later than fourteen (14) days from the date of the closing of the hearing or, if there is no oral hearing, from the date of the AAA’s transmittal of the final statements and proofs to the arbitrator in accordance with the AAA Rules.
(b) Prohibition of Class and Representative Actions and Non-Individualized Relief. The arbitrator may award injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief necessitated by that party’s individual Claim; any injunctive relief must be individualized in nature and cannot affect individuals other than the claimant. YOU AND WE AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN YOUR OR OUR INDIVIDUAL
CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING, OR AS A PRIVATE ATTORNEY GENERAL OR ON BEHALF OF THE GENERAL PUBLIC. Further, unless both you and we agree otherwise, the arbitrator may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding. If a court decides that any part of this arbitration provision (other than the prohibition of class or representative actions and/or consolidation) is invalid or unenforceable, the other parts of this arbitration provision will still apply. However, if a court decides that this paragraph’s prohibition of class or representative actions and/or consolidation is invalid or unenforceable, then the entirety of this arbitration provision will be null and void.
(c) Access to Government Agencies. This arbitration provision does not preclude you from bringing issues to the attention of federal, state, or local agencies. Such agencies can, if the law allows, seek relief against us on your behalf. (d) Other Remedies. This arbitration provision and the exercise of any of the rights you and we have under this provision will not prohibit you or us from exercising any lawful rights either you or we have to use other remedies available to preserve, foreclose or obtain possession of real or personal property or exercise self-help remedies, including set-off rights as described in this Agreement.
47. Amendment
From time to time, we may amend, add to or change (an “amendment”) the provisions of this Agreement. Amendments will be communicated by notice given to you by mail or if permitted by law, electronic notice, and will be effective on the date indicated in the notice. If an effective date is not indicated, the effective date will be ten (10) Business Days from the date the notice was sent. If you do not wish to be bound by an amendment, you may close the Account before the effective date of the amendment. Your continued use of the Account after the effective date is deemed your agreement to the amendment. Any other amendment will be effective only if it is in writing and signed by our duly authorized officer. A change in our interest rates, fees or service charges, funds availability or operating procedures does not constitute an amendment of this Agreement and we may effect such changes without prior notice to you. #17..
- 1034 -
06/2025 Ver 5.2 Page 16 of 19
48. Entire Agreement
This Agreement, including our Funds Availability Policy and information specifically referred to in this Agreement, and any separate service or master agreement in effect constitutes the entire agreement between us regarding the subject matter of this Agreement and supersedes any and all prior representations, warranties, understandings and proposals. There are no oral agreements between us. You acknowledge that you have not relied on any representation or warranty, express or implied, or other understanding or proposal not contained in this Agreement, the Funds Availability Policy or information specifically referred to in this Agreement, or any separate service or master agreement in effect. This Agreement is binding upon and for the benefit of the account owners, their permitted successors and assigns, and us and our successors and assigns. This Agreement also applies to each of your subsidiaries and affiliates which have an Account with us or have access to the Account as if it were a party to this Agreement. You represent and warrant to us that you have the authority to act for and bind such subsidiaries and affiliates to this Agreement, and agree to be responsible for any unpaid fees, charges or other obligations of such subsidiaries or affiliates.
Otherwise, except as expressly provided in this Agreement, this Agreement is not for the benefit of any other person, and no other person will have any right against you or us in connection with this Agreement.
49. Cash Withdrawals
If you request to withdraw large amounts in cash, we may place reasonable restrictions on the time and place of your withdrawal based on our security and operational considerations.
50. Defined Terms
Available Balance — means the most current record we have about the balance in the Account that is available for withdrawal from the Account.
Business Day — means every day except Saturdays, Sundays or federal holidays.
Item — includes a check, draft, demand draft, preauthorized draft, or other order or instruction for the payment, transfer, or withdrawal of funds (including a withdrawal slip), and electronic transactions (including ACH, ATM and POS). #17..
- 1035 -
06/2025 Ver 5.2 Page 17 of 19
Our general policy for Commercial Checking Accounts (including Commercial Checking, Commercial NOW and Commercial Money Market) is to make the funds from your wire transfers and electronic direct deposits available to you on the Business Day we receive the deposit. Funds from cash deposits will be made available to you on the day of deposit. Funds from check deposits will be made available to you according to the Availability Schedule assigned to your check deposits. The length of delay varies depending on the type and method of deposit, and is explained below. Once the funds are available, we will use the funds to pay checks you have written or you can withdraw the funds in cash.
Determining Availability
For purposes of this Funds Availability Policy, every day is a “Business Day” except Saturdays, Sundays and federal holidays. If you make a deposit before our cut-off time on a Business Day that we are open, we will consider that day to be the day of your deposit.
The cut-off time for deposits made at a branch is the closing time of the branch where the deposit is made. Deposits made at a night drop location or night depository will be retrieved and verified by us once at the beginning of each Business Day. Therefore, if you use a night drop during the day, that deposit will not be considered received by us until the next Business Day when we retrieve it and process it. The cut-off time for deposits made in connection with certain banking services that we offer may vary; the earliest cut-off time is 4:00 p.m. Central Time (except with respect to certain vault services, for which cut-off times range between 1:00 p.m.
ET and 5:00 p.m. PT). Please review the service agreements that govern these banking services to determine the applicable cut-off times. If you make a deposit after our cut-off time or on a day that we are not open, we will consider that the deposit was made on the next Business Day we are open.
Immediate Availability
Cash deposited at branches or through the mail before the cut-off times listed above will be available for immediate use on the day that we receive the deposit. Because we cannot process deposits made until we receive them, we strongly recommend that you do not send cash deposits through the mail. Cash deposited after the cut-off times will be available on the next Business Day after we receive the deposit.
Same Day Availability
Funds from the following types of deposits will generally be available on the Business Day we receive the deposit:
Federal Reserve Bank wire transfers
Preauthorized electronic credits
Next Day Availability
Funds from the following types of deposits will generally be available on the next Business Day after the day we receive the deposit:
U.S. Treasury checks
Checks drawn on and drafts payable through us.
Federal Reserve Bank checks, Federal Home Loan Bank checks, and postal money orders State and local government checks
#17..
- 1036 -
06/2025 Ver 5.2 Page 18 of 19
Checks drawn on banks located inside the United States of America Other Check Deposits
Subject to Section 9 of the Commercial Account Agreement, funds from all other checks will generally be available no later than the second Business Day after the day of your deposit. The first $275 of these deposits, however, will be available on the first Business Day after the day of your deposit.
Cashing a Check Not Drawn On Us
If we cash a check that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your checking account or another account you have with us (or one of our affiliates). Those funds will be available at the time funds from the check we cashed would have been available had you deposited it.
Longer Delays May Apply To Some Deposits
In some cases, we will not make all of the funds that you deposit by check available to you as described above. In these cases, funds will generally be available on the second Business Day after we receive your deposit; however, the first $275 of your deposit, will still be available on the first Business Day. If we are going to delay availability, we will notify you at the time you make your deposit. We will also tell you when the funds will be available. If your deposit is not made directly through one of our employees, or if we decide to take this action after you leave the premises, we will mail you the notice no later than the day after we receive your deposit. We will also tell you when the funds will be available. If your deposit is not made directly through one of our employees, or if we decide to take this action after you leave the premises, we will mail you the notice no later than the day after we receive your deposit.
If you will need the funds from a deposit immediately, you should ask us when the funds will be available.
In addition, funds you deposit by check may be delayed for a longer period under the following circumstances:
If we believe a check deposited will not be paid
If deposited checks total $6,725 or more on any one day If you redeposit a check that has been returned unpaid
If you have overdrawn your account repeatedly in the last six months If there is an emergency situation such as a failure of communications or computer equipment, or severe weather We will attempt to notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. Funds will generally be available no later than the seventh Business Day after the day of your deposit.
Additional Information Concerning Your Accounts
Endorsement Requirements
Payee endorsements are restricted by federal law to an area up to 1.5 inches from the trailing edge of a check. The trailing edge is defined as the left side of the check when looking at it from the front. The endorsement area reserved for the bank of first deposit is the area 3.0 inches from the leading edge of the check and 1.5 inches from the trailing edge of the check. The leading 3.0 inches is the area designated for endorsements of subsequent collecting banks. While checks may vary in size, the size of the areas designated for payee endorsement will always be as described above.
Legibility of Endorsements
Endorsements or other writing or markings on the reverse side of checks by issuers, payees, or endorsers should be limited to the space reserved for the payee’s endorsement as described above. Otherwise, the endorsement of the depository bank may be #17..
- 1037 -
06/2025 Ver 5.2 Page 19 of 19
obscured, and this may delay the return of the check or the notice of nonpayment. You shall be liable for any loss or damages arising from this condition.
Sufficient Balances
While funds will be made available based on the preceding time frames, you remain responsible for ensuring that sufficient ledger balances and Available Balances are kept or deposited to cover all withdrawals and other charges against the Account. If a deposited check is returned unpaid, we retain the right to charge that item back to the Account even though the funds for that check were made available. You remain responsible to immediately repay any overdrafts.
If you have any questions regarding this policy, or about the availability of any deposit you make, please contact the Client Response Center at 1-877-895-3278.
International Items
All international items should be directed to:
Mailing Address:
BMO Bank
Naperville Operations Center
Attn: Foreign Collections
PO Box 5731
Carol Stream, IL 60197
Overnight / Courier:
BMO Bank
Naperville Operations Center
Attn: Foreign Collections
1200 E. Warrenville Road
Naperville, IL 60593
Availability Schedules are subject to
change without notice.
#17..
- 1038 -
Corporate Card Agreement
This Agreement dated April 1, 2026 is made between:
CITY OF MODESTO
(the “Customer”)
- and -
EACH BANK THAT IS A SIGNATORY TO THIS AGREEMENT
The parties acknowledge each of the following:
1. Bank of Montreal (“BMO”) provides corporate card services in Canada.
2. BMO Bank N.A. (“BMO U.S.”) provides corporate card services in the United States.
3. The Customer has requested a Canadian Program or a U.S. Program, or both, and each Bank that has executed this Agreement has agreed to provide the Program within their respective jurisdictions in accordance with the terms and conditions stated in this Agreement.
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party, the parties agree as follows:
1. Definitions and Interpretation
(a) Capitalized terms used in this Agreement are defined as follows:
“Affiliate” means an entity which is related to the Customer in one of the following ways: the entity is the parent of the Customer, the entity is a subsidiary of the Customer, the entity and the Customer are each subsidiaries of the same parent, or the entity is a joint venture owned in part by the Customer;
“Affiliate Account” means a sub-account of the Customer Account established by the Bank for use by a division or Affiliate of the Customer;
“Agreement” means this corporate card agreement (including all attached Schedules), as such agreement may be amended and restated from time to time; “Bank” refers to the contracting parties to this Agreement other than the Customer and has the following meaning:
(i) where there is only a Canadian Program as evidenced by the Program features selection in Schedule 1, “Bank” means BMO alone, and for the avoidance of doubt, BMO U.S. is not a party to this Agreement; or
#17..
- 1039 -
BMO Corporate Card Agreement
(ii) where there is only a U.S. Program as evidenced by the Program features selection in Schedule 1, “Bank” means BMO U.S. alone, and for the avoidance of doubt, BMO is not a party to this Agreement; or
(iii) where there is both a Canadian Program and a U.S. Program as evidenced by the Program features selection in Schedule 1, “Bank” means both BMO and BMO U.S.; “Billing Period” means the period beginning the day after the immediately preceding Monthly Billing Date and ending on the current Monthly Billing Date; “BMO” means Bank of Montreal;
“BMO U.S.” means BMO Bank N.A.;
“Business Day” means, with respect to the Canadian Program, a day on which BMO is generally open for business in Ontario, Canada, and with respect to the U.S. Program, a day on which BMO U.S. is generally open for business in Illinois, USA, and in each case does not include Saturdays, Sundays or statutory holidays;
“Canadian Program” means the Program provided to a Customer or an Affiliate with a Canadian address;
“Card” means a corporate card issued by the Bank in connection with the Customer Account, which may be issued as a physical card or a card number including a Virtual Card; “Card Account” means a sub-account of the Customer Account which is established for each Card; “Card Account Statement” means the monthly statement setting out the outstanding balance of a Card as of the stated Monthly Billing Date;
“Card Limit” means the credit limit established for a Card; “Card Network” means one of the organizations, such as MCI or Visa, which provide systems to facilitate payment transactions, including those under this Agreement; “Card Notice” has the meaning given to it in section 7(c); “Cardholder” means an employee of, or a contractor providing services to, the Customer or Affiliate to whom a Card is issued and in the case of a Non-Personalized Card, means any person using the Non-Personalized Card;
“Cardholder Agreement” means the agreement in effect from time to time between the Bank and Cardholders who are jointly and severally liable for the Cards issued to them and governs the use of their Card Accounts;
“Cash Advance” means an advance of cash obtained through the use of a Card from the Bank or another financial institution accepting the Card;
“Change” has the meaning given to it in section 16(g)(ii); #17..
- 1040 -
BMO Corporate Card Agreement
“Change Notice” has the meaning given to it in section 16(g)(ii)(A); “Charges” means all charges posted to the Customer Account including all Transactions, fees and service charges;
“Customer Account” means the corporate card account established by the Bank for the Customer; “Customer Account Statement” means a monthly statement showing the outstanding balance of the Customer Account as of a Monthly Billing Date;
“Customer Credit Limit” means the Customer Account credit limit established by the Bank from time to time, and which as of the Effective Date is shown in Schedule 1; “Effective Date” refers to the first day that the Agreement is in effect, as shown in Schedule 1; “Electronic Distribution” means distribution through e-mail or posting on the Program Website; “Fleet Card” is a Product that allows for purchase of fuel and vehicle maintenance expenses on a Card;
“Insurance Certificates” means documents evidencing Program-related insurance coverage including insurance certificates, policies of insurance, and summaries of assistance services (any two or more of which may be combined into a single document) including any notices of amendment to any of the foregoing documents;
“Insurance Documents” means collectively Insurance Certificates and Insurance Notices; “Insurance Notices” means any document relating to the Insurance Certificates that the Bank may send to either or both of the Customer and the Cardholders including changes to insurance coverage, legal and regulatory information, or any insurance related offer; “Material Adverse Change” means any change or event which constitutes a change in the business, operations, condition (financial or otherwise) or properties of a party which when taken as a whole would materially impair a party’s ability to timely and fully perform its obligations under this Agreement or the ability of a party to enforce its rights and remedies under this Agreement; “MCI” means Mastercard International Inc., which is the entity that administers the Mastercard program internationally;
“Monthly Billing Date” means the day in each month on which the Bank prepares the Statements; “N.A.”means not applicable, except in the instance of BMO Bank N.A., where it means “National Association;
“Non-Personalized Card” means any Virtual Card and any Card that is not issued to a particular individual and does not bear an individual’s name, such as a Card assigned to a department or vehicle of the Customer;
“Objection Notice” has the meaning given to it in section 16(g)(ii)(B); “Objection Period” has the meaning given to it in section 16(g)(ii)(B); #17..
- 1041 -
BMO Corporate Card Agreement
“Onboarding Documentation” means the documentation package delivered by the Bank to the Customer which includes the following: the documents to be completed by the Customer to set up the Customer Account, the terms and conditions of the applicable liability waiver program referred to in section 7(e), and the terms and conditions of any features of the Card; "One Card” is a Product that allows for purchasing, travel and fleet transactions on a Card; “Past Due Amount” has the meaning given to it in section 6(a); “Payment Due Date” means the day by which full payment of the amount set out in a Statement is due, which will be approximately the number of days after the Monthly Billing Date shown in Schedule 1;
“PIN” means a personal identification number;
"Product” is a type of Card or Account which is part of a Program under this Agreement. “Program” has the meaning given to it in the recitals;
“Program Administrator” means an individual appointed by the Customer to act on behalf of the Customer in connection with the operation and administration of the Customer Account; “Program Submission” means a submission by a Program Administrator to the Bank in connection with Routine Matters;
“Program Website” means the website established by the Bank through which the Customer may access Statements, reports and other Program-related services; “Purchase” means the use of a Card to charge to the Customer Account the price of goods or services obtained from a Vendor;
“Routine Matters” refers to all matters relating to the day-to-day operation and administration of the Program, including: (a) issuing and cancelling Cards; (b) adding and removing Cardholders; (c) changing Cardholders’ names, addresses, phone numbers, cost centres, departments and Card Limits; (d) changing the organizational or hierarchy set-up; (e) changing the Customer Credit Limit; “Schedule” means a schedule to this Agreement;
“Statements” means collectively the Card Account Statements and Customer Account Statements and a “Statement” refers to a Card Account Statement or Customer Account Statement; “Statement Review Period” means sixty (60) days from the Monthly Billing Date; “T&E Card” is a Product that is the travel and entertainment Card and includes Travel Accounts; “TBD” means to be determined;
“Transaction” means any use of a Card which results in a charge to the Customer Account including Purchases and Cash Advances, whether or not the Card was presented to a Vendor (such as in the case of an internet, mail or telephone order purchase) or the Cardholder's signature was obtained or by use of a PIN;
#17..
- 1042 -
BMO Corporate Card Agreement
“Travel Account” means the T&E Card with corporate liability that can only be used to book air travel, train travel, common carrier travel and hotel or motel accommodations; “U.S. Program” means the Program provided to a Customer or an Affiliate with a U.S. address; “Vendor” means a merchant or supplier.
“Vendor Payment Solution” means a service that that facilitates transactions between Customers to Vendors.
“Virtual Card” means a Card number that is generated from a Customer’s Card which in turn has certain Customer designated functionality including limited use to a particular number of times (for example, one time use), a particular period of time (for example, a week), and for a particular amount of money (for example, $1,000.00);
"Visa” means Visa U.S.A. Inc., which is the entity that administers the Visa program in the U.S.; "V-PAYO” refers to a service that facilitates payments by the Customer to its participating Vendors; “V-PAYO Transaction” means a transaction occurring through V-PAYO; and (b) References to “includes” mean “includes, without limitation” and references to “including” mean “including, without limitation”.
(c) Words in the singular include the plural and words in the plural include the singular. (d) The Schedules constitute an integral part of this Agreement. (e) The division of this Agreement into sections and subsections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement.
2. Program Features
(a) The Bank has sole discretion over the management, operation, content and features of the Program and the Cards. Subject to the terms of this Agreement, the Bank may modify any aspect of the Program. In the event that the Program is modified, the Bank will:
(i) notify the Customer of any material pricing or Program feature changes or otherwise as required by law; and
(ii) will not notify the Customer of any immaterial operational changes that would not adversely affect the Customer (including for example a change to an interactive voice response menu).
(b) The features of the Program selected by the Customer, together with the Customer Credit Limit and notice provisions are shown in Schedule 1.
(c) Billing information and options, together with customer service, dispute settlement provisions, and terms and conditions pertaining to V-PAYO are shown in Schedule 2. #17..
- 1043 -
BMO Corporate Card Agreement
(d) Pricing and fees are shown in Schedule 3, and are subject to change by the Bank on thirty (30) days advance written notice to the Customer.
(e) Terms and conditions pertaining to the Electronic Distribution of Insurance Documents are set out in Schedule 4.
(f) Terms and conditions pertaining to the rebate program are set out in Schedule 5.
3. Accounts and Cards
(a) The Bank will establish a Customer Account and extend credit to the Customer by approving Transactions up to the Customer Credit Limit. The Customer Account must only be used for business purposes and not for personal, family or household purposes; provided however that any violation of this limited use commitment does not relieve the Customer of its obligations to pay the Bank for all Charges. Neither Customer nor any Cardholder shall use any Card to make any Transaction that is illegal..
(b) Through a Program Submission, the Customer may establish an Affiliate Account and allocate a portion of the Customer Credit Limit to that Affiliate Account. (c) The Bank will issue a Card to a Cardholder with a Card Limit pursuant to the terms of a Program Submission. If a physical Card is requested it will bear the name of the Cardholder and the Customer’s or Affiliate’s name or identifier, unless the Card is a Non-Personalized Card, in which case it will bear the name of the applicable department or the vehicle number. (d) The Customer will use a Program Submission to direct the Bank to cancel a Card. The Customer will continue to be liable for all Charges to the Customer Account that occur through the use of any such Card before the Bank processes the Program Submission. The Bank will process the Program Submission in accordance with the service levels set out in section 2(a) of Schedule 2. (e) Cards are the property of the Bank and cannot be transferred. (f) The Customer may request a Non-Personalized Card. The Customer will be liable for all Purchases made with a Non-Personalized Card whether or not an authorized Cardholder made the Purchases. (g) If the credit extended by the Bank for the Program is unsecured, then the Bank may in its sole discretion change the Customer Credit Limit without prior notice from time to time. (h) The Bank may in its sole discretion do each of the following without prior notice from time to time in order to manage credit risk or to facilitate the smooth operation of the Program for the Customer:
(i) change the portion of the Customer Credit Limit allocated to an Affiliate Account; (ii) change a Card Limit; and
(iii) issue renewal, replacement or temporary Cards.
(i) The Bank may cancel or suspend the right to use a Card in each of the following instances:
(i) if the Bank detects unusual or suspicious activity on the Card Account; #17..
- 1044 -
BMO Corporate Card Agreement
(ii) if the outstanding balance of the Card Account is not paid in full within two billing cycles; or
(iii) if required by law.
4. Charges, Cash Advances and Foreign Exchange
(a) Subject to the terms of this Agreement, a Cardholder may use a Card for the purpose of completing Transactions. All Charges incurred on a Card will be recorded on the corresponding Card Account. (b) The Bank may allow Cardholders to obtain Cash Advances only if the Customer has selected a Cash Advance option in the Program features chart in Schedule 1 and the Program Administrator has authorized Cash Advances for that Cardholder. For the avoidance of doubt, Cash Advance features are not available for Non-Personalized Cards.
(c) When a Card is used to make a Transaction in a foreign currency, the relevant Card Network will convert the amount into the currency of the Card using a conversion rate in effect on the day the relevant Card Network processes the Transaction. The Card Network conversion rate is either a government-mandated rate or a wholesale market rate. The Bank will increase the converted amount by the foreign transaction fee set out in Schedule 3. The foreign currency conversion rate in effect on the processing date for a Transaction may differ from the rate in effect on the Transaction date.
(d) When a foreign currency Transaction is refunded to a Card, the relevant Card Network will convert the amount into the currency of the Card using the Card Network conversion rate described above.
The Bank will reduce the converted amount by the foreign transaction fee set out in Schedule 3.
The foreign currency conversion rate in effect on the processing date for a refund of a Transaction may differ from the rate in effect on the date on which the Transaction was refunded.
5. Statements
(a) The Bank will prepare Statements on each Monthly Billing Date and make them available to the Customer. Regardless of the billing option selected by the Customer in Schedule 1 or whether the Customer receives a Statement, the Customer will be liable for payment of the aggregate outstanding balance of the Customer Account every month. (b) The Customer will ensure that each Statement is examined upon receipt. (i) If the Customer does not notify the Bank of an error or omission with regard to a Statement within the Statement Review Period, the Statement will be deemed conclusively to be correct.
(ii) If the Customer does notify the Bank of an error or omission with regard to a Statement within the Statement Review Period, the dispute settlement procedures in section 2(c) of Schedule 2 will be followed.
6. Payments and Late Fees
(a) Each month, the Customer must pay in full the aggregate outstanding balance shown on each Customer Account Statement on or before the Payment Due Date and the failure to do so will be a default by the Customer. Full payment is required even if the Customer or Cardholder expects #17..
- 1045 -
BMO Corporate Card Agreement
to receive a credit from a Vendor. In the event of a disputed Charge, the Customer is entitled to reduce the full payment by the amount credited pursuant to section 2(c)(ii) of Schedule 2. Any amount not paid by the Payment Due Date will be considered past due (the “Past Due Amount”). (b) Each time that the Customer does not pay in full on the Payment Due Date the amount due on a Statement, then the following will occur until the Card Account in question is brought current so that there are no Past Due Amounts:
(i) The Customer will be assessed a late fee on the Past Due Amount that is outstanding as of the Monthly Billing Date of each subsequent Statement until the Past Due Amount is paid in full.
(ii) Any late fees shown in a Statement that are not paid in full on the corresponding Payment Due Date are added to Past Due Amount and will be subject to the late fee. (iii) The late fees are set out in Schedule 3.
(c) The Bank may accept payments that are marked with restrictive endorsements such as “payment in full” without losing any of its rights under this Agreement.
7. Customer Liability
(a) The Customer will be liable to pay the Bank for all Charges to the Customer Account even if the aggregate of all outstanding Charges exceeds any Card Limit or the overall Customer Credit Limit and even if as between the Customer and a Cardholder any Charge resulted from improper use of a Card by the Cardholder.
(b) The Customer will be liable for any pre-authorized payments charged to a Card Account, even after the Card Account is cancelled, unless the Customer provided a written cancellation request to the Vendor prior to being charged. If requested, the Customer will provide the Bank with a copy of the written cancellation request to the Vendor.
(c) The Customer will: (i) promptly notify the Bank of any possible loss, theft, or unauthorized use of a Card (a “Card Notice”); (ii) where reasonably possible, destroy or return the Card in question; and (iii) cooperate with the Bank in its efforts to investigate the alleged unauthorized use. (d) The Customer will not be liable for any unauthorized use of a Card, except that the Customer will be liable for each of the following:
(i) the use of a Card by an individual who has been authorized by the Customer or Cardholder to use the Customer Account, even if that person is not a Cardholder or that person does not act in accordance with the Customer’s or Cardholder’s instructions or expectations;
(ii) any use authorized by the Customer or a Cardholder before the Bank receives a Card Notice; and
(iii) any Transaction completed with a PIN by a Cardholder. (e) The Customer may take advantage of the BMO Corporate Card Liability Waiver Program (for a Canadian Program), the MasterCoverage Liability Protection Program (for a U.S. Program on the #17..
- 1046 -
BMO Corporate Card Agreement
Mastercard network), or VisaCoverage Liability Protection Program (for a U.S. Program on the Visa network) for certain wrongful Transactions. The Bank will include copies of the terms and conditions of the applicable liability waiver program with the Onboarding Documentation. (f) The Customer will pay all reasonable legal fees and disbursements that the Bank incurs in any legal action to recover money payable by the Customer to the Bank pursuant to this Agreement.
8. Joint and Several Liability
If the Customer has selected joint and several liability for one or more Card products in Schedule 1, the following additional terms and conditions apply:
(a) the Customer and each Cardholder must complete a Card application and the Cardholder will be subject to a Cardholder Agreement with the Bank, which may be amended by the Bank from time to time on thirty (30) days advance written notice (copies of each document in effect as of the Effective Date will be included with the Customer’s Onboarding Documentation); (b) the Customer and each Cardholder will be jointly and severally liable for all Charges to that Cardholder’s Card Account;
(c) the Cardholder will from time to time receive information regarding pricing and fees that are applicable to a Cardholder;
(d) the Customer will use commercially reasonable efforts to ensure that each Cardholder reviews their Card Statements;
(e) when cancelling a Card, the Customer’s written notice must include the Cardholder’s last known business address, home address, and phone number; and
(f) The Bank will pursue collection efforts against each Cardholder for up to ninety (90) days after the Monthly Billing Date. The Customer will use commercially reasonable efforts to assist the Bank in collecting any outstanding Charges from the Cardholder. Should the Bank be unable to collect the balance due, the Customer will, upon receipt of a notice from the Bank, promptly (but in any event within 3 Business Days) pay that Cardholder’s unpaid Charges including any late fees payable in respect of those Charges.
(g) Applicable only to the Canadian Program: Solely with respect to a joint and several Card issued in connection with an Affiliate Account, the following additional terms apply:
(i) References to the Customer in sections 8(a)-(f) refer to the Affiliate for which a Card was issued.
(ii) This Agreement creates third party beneficiary rights in favour of an Affiliate that has joint and several cards issued to its Cardholders pursuant to the terms of the Program, and that Affiliate may enforce the terms of this Agreement. (iii) Upon request by the Customer, the Bank will provide a written confirmation to the Customer setting out the names of all Affiliates that have at least one joint and several Card Cardholder.
#17..
- 1047 -
BMO Corporate Card Agreement
(iv) The Affiliate must communicate to the Bank through the Customer’s Program Administrator.
(v) The Customer will remain solely responsible for providing Program instructions to the Bank.
(vi) The Affiliate authorizes the Bank to share all information, provide all instructions and issue all demands related to the Affiliate Account to the Customer. In turn, the Customer agrees to provide all such communications to the Affiliate. (vii) In the event that the Affiliate fails to pay the Bank in accordance with section 8(f), the Customer will, upon receipt of a notice from the Bank, promptly (but in any event within 3 Business Days) pay the Bank the amount owed pursuant to section 8(f).
9. Program Administrator
(a) The Customer will from time to time provide the Bank with written notice specifying which individuals are to act as its Program Administrators. Those notices will be effective when the Bank receives them.
(b) The Customer consents to the Electronic Distribution of Insurance Documents on the terms and conditions set out in Schedule 4.
(c) The Bank may deal with any Program Administrator with regard to Routine Matters. The Bank may rely on any Program Submission received from a Program Administrator through the Program Website, the Virtual Card Program related website, telephone, or e-mail. (d) An existing Program Administrator may establish a user identification and password for new Program Administrators. Program Administrators may change their passwords at any time and will do so when required by the Bank.
(e) The Customer will protect each user identification and password from fraudulent use and will immediately notify the Bank of any unauthorized disclosure of any user identification and password.
(f) Program Administrators will provide the Bank with information that the Bank requires for the operation and administration of the Program.
(g) The Bank will send each of the following to the Program Administrator, who will distribute the following to the appropriate individuals and provide responses to the Bank where required:
(i) all Cards, unless a Program Administrator directs the Bank to send a Card directly to a Cardholder;
(ii) correspondence pertaining to Routine Matters and Program-related information requests; and
(iii) notices regarding changes to the Program, including the matters referred to in section 3(g), changes to Cardholder Agreements referred to in section 8(a), and changes to Program-related features and correspondence to Cardholders, including Insurance Documents.
#17..
- 1048 -
BMO Corporate Card Agreement
10. Program Website
The Bank may post the information referred to in section 9(g)(iii) to the Program Website. The Customer will provide each Cardholder with a copy of any posted information relating to Cardholders or provide each Cardholder with direct access to the Program Website so that the Cardholder can review the information directly.
11. Customer Responsibilities
(a) The Customer will be solely responsible for establishing and monitoring its own internal Programrelated procedures or guidelines for Cardholders to ensure compliance with this Agreement. The Bank will not inquire or verify whether any use of a Card, or any Charge to the Customer Account, is in accordance with the Customer’s procedures or guidelines. (b) The Customer will, and will require Cardholders to, abide by all written security instructions and directions provided by the Bank from time to time.
(c) The Customer will provide the Bank with financial statements upon prior written request from the Bank. The financial statements provided shall be used by the Bank for purposes related to this Agreement, including but not limited to, annual credit review.
12. Representations and Warranties
The Customer represents and warrants to the Bank that as of the date of this Agreement:
(a) it and each of its Affiliates that participate in the Program are duly organized, validly existing and in good standing under the laws of all necessary jurisdictions; (b) it has full power and authority to execute, deliver and perform its obligations under this Agreement;
(c) that the execution of this Agreement has been duly authorized by all necessary action, and will create a valid and binding obligation of Customer; and
(d) all documents provided by the Customer or its authorized officers or employees in connection with the signing of this Agreement including documents used to ascertain the existence of the Customer and the authority of the signers of this Agreement to bind the Customer are true and accurate as of the date that the Customer signs this Agreement.
13. Term and Termination
(a) (i) Initial Term: The initial term of this Agreement shall commence on the Effective Date and remain in force for a period of three (3) years from the Effective Date. (ii) Renewal Term of the Agreement. Upon expiration of the initial term, this Agreement shall automatically renew for additional successive terms of one (1) year unless either party delivers written notice of non-renewal to the other party at least ninety (90) days prior to the end of the then-current term, or this Agreement is terminated in accordance with the terms of this Agreement.
(b) Either party may terminate this Agreement as follows:
#17..
- 1049 -
BMO Corporate Card Agreement
(i) without cause, on ninety (90) days prior written notice to the other party; (ii) immediately and without prior notice in the event of a Material Adverse Change, bankruptcy or insolvency of the other party;
(iii) on notice to the Customer of late payment without Customer bringing the Customer Account current by the next billing cycle; and
(iv) immediately and without further notice if a party is in default in the performance of any of its other obligations and such default continues for thirty (30) days following receipt of a written notice regarding such default from the other party.
The right to terminate is in addition to any other right the non-defaulting party may have in respect of the default.
(c) Upon termination of this Agreement:
(i) the Bank will cancel all outstanding Cards and revoke all rights and benefits of the Customer and its Cardholders;
(ii) the Customer will have electronic access to the Card data through the Program Website for a period of 6 months following the termination date; (iii) the Bank will cooperate with the Customer’s commercially reasonable requests to assist with the orderly transfer of corporate card services to another financial institution. If the Customer requests the Bank’s assistance and in order to provide the assistance requested, the Bank would incur costs over and above its day-to-day operating costs (such costs, “Transfer Costs”), the Bank will advise the Customer before the Transfer Costs are incurred. If the Customer still requires the assistance requested, the Customer will pay the Bank the Transfer Costs within 30 days of the date the Bank provides the Customer with an invoice for the Transfer Costs; and
(iv) the Customer will continue to be liable for, and pay, the aggregate of all Charges on the Customer Account whether or not then posted to the Customer Account (including Charges not yet incurred and accrued fees) and all such Charges will immediately be due and payable.
14. Disclaimers
(a) The Bank always attempts to ensure that the Program will be operational, and to respect any available Card Limit or any available transaction limit per Card or per day or any other available limit requested by the Customer. However, due to the interconnectivity of the Card Network systems, the Bank and Vendor systems and the inherent limitations and options of each system, the Bank cannot warrant that the Program will be uninterrupted or error-free or that any limits established by the Customer (such as Card Limits) will always be respected. In addition, reports prepared at the Customer’s request are provided to the Customer without representation or warranty as to accuracy of the information provided. Therefore, the Customer waives any and all claims that it may have against the Bank arising out of the use and performance of the Program, except for claims for damages referred to in section 14(d). (b) The Bank is not responsible for any defects in, or the poor quality of, any merchandise or services #17..
- 1050 -
BMO Corporate Card Agreement
obtained by means of any Card. The Customer is responsible for settling any dispute between the Customer and a Vendor, including with respect to a Vendor's right to compensation, and any such dispute will not affect the Customer's obligation to pay all Charges to the Customer Account in full to the Bank in accordance with the terms of this Agreement. (c) Third parties may provide some of the Program benefits and enhancements including reward programs as well as services and insurance coverage provided under separate certificates and policies. The Bank is not responsible or liable for anything in connection with those third party benefits and enhancements.
(d) The Bank is not liable for any claim made, or loss or damages suffered by, the Customer arising directly or indirectly from the Customer's use of the Program, except for damages which the Customer suffers as a result of the Bank's gross negligence or wilful misconduct related to the terms of the Agreement. In no event is the Bank liable for any special, indirect or consequential damages, including but not limited to, lost profits and lost revenues.
15. Confidential Information
(a) The Customer acknowledges that the terms of this Agreement, including information relating to pricing, are confidential, will not be disclosed and will be distributed only to its employees and agents who have a need to know the information.
(b) The Bank acknowledges that any financial and other non-public information that the Customer provides to the Bank about its business and its Cardholders is confidential to the Customer. The Bank will use prudent measures to maintain that information securely, will distribute the information only to its employees and agents who have a need to know it for the performance of their duties, and will use it only in connection with the services contemplated by this Agreement.
16. Miscellaneous
(a) Governing Law: The governing law of this Agreement will be determined as follows:
(i) if there is only a Canadian Program, or there is a Canadian Program and U.S. Program and the head office of the Customer identified in Schedule 1 is located in Canada, then this Agreement will be interpreted in accordance with the laws of the Province or Territory where the Customer’s head office is located and the federal laws of Canada applicable therein. The parties must submit to the jurisdiction of the courts of the Province or Territory in which the Customer’s head office is located; and (ii) if there is only a U.S. Program, or where there is a Canadian Program and U.S. Program and the head office of the Customer identified in Schedule 1 is located in the United States, then this Agreement will be interpreted in accordance with U.S. federal law and, to the extent state law must be applied, then the law of the State of Illinois. The Customer submits to the jurisdiction of the courts of the State of Illinois and the United States District Court for the Northern District of Illinois and agrees that any legal action or proceeding with respect to this Agreement may be commenced in such courts.
IN EITHER CASE THE PARTIES EACH IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING RELATED TO THIS AGREEMENT.
#17..
- 1051 -
BMO Corporate Card Agreement
(b) Assignment: The Customer may not transfer or assign this Agreement without the prior written consent of the Bank, which will not be unreasonably withheld. The amalgamation, merger or consolidation of the Customer will be deemed to be an assignment of this Agreement. If transferred or assigned without the Bank's prior written consent, this Agreement will be deemed to be terminated, unless the Bank agrees in writing otherwise. (c) Severability: If any provision of this Agreement is illegal, prohibited or unenforceable in any jurisdiction, in whole or in part, the remaining provisions of this Agreement remain valid and enforceable in that jurisdiction, and such determination does not render the Agreement invalid or unenforceable in any other jurisdiction.
(d) Waiver: The failure or delay by either party in exercising any right or privilege with respect to the non-compliance with any provisions of this Agreement by the other party and any course of action on the part of either party, will not operate as a waiver of any rights of such party unless made in writing by such party. Any such waiver will be effective only in the specific instance and for the purpose for which it is given and will not constitute a waiver of any other rights and remedies of such party with respect to any other or future non-compliance of the other party. (e) Time of the Essence: Time will be of the essence of this Agreement. (f) Entire Agreement: This Agreement together with any Onboarding Documentation and, if applicable, the application and Cardholder Agreement applicable to Card products that bear joint and several liability constitutes the entire agreement between the parties with respect to the subject matter and supersedes all previous corporate card agreements (without novation), negotiations, proposals, commitments, writings and understandings of any nature whatsoever, whether oral or written, pertaining to the subject matter herein, unless they have been expressly incorporated by additional reference in this Agreement. (g) Amendment:
(i) Subject to section 16(g)(ii), this Agreement may be amended only by a written agreement signed by both parties.
(ii) If the Bank makes a change to the standard terms of the Program on a Program-wide basis, a Product, or a service associated with a Product (each such event, a “Change”), the following terms apply:
A. The Bank may change this Agreement at any time upon written notice to the Customer (a “Change Notice”).
B. The Customer may, within thirty (30) days of the effective date of the Change (the “Objection Period”) notify the Bank that it does not agree to the Changes set out in the Change Notice (the “Objection Notice”).
C. An Objection Notice constitutes notice of termination of the Agreement on a without cause basis in accordance with section 13(b)(i).
D. In the event that the Agreement is terminated as a result of the Bank’s receipt of an Objection Notice, the Customer must still pay all amounts owing to the Bank pursuant to the terms of the Agreement but without reference to the Changes to which the Customer objected.
#17..
- 1052 -
BMO Corporate Card Agreement
E. If the Bank does not receive an Objection Notice from the Customer within the Objection Period, the Customer will be deemed to have agreed to the Change indicated in the Change Notice.
(h) Survival: This section and the following sections will survive termination or expiration of this Agreement along with such definitions, interpretive provisions and such other terms and conditions in this Agreement as are necessary to give effect to the following sections: 3(e) (Card ownership), 4(c) and (d) (foreign exchange conversion), 6 (payments and late fees), 7 (Customer liability), 8 (joint and several liability), 13(c) (effect of termination), 14 (disclaimers) and 15 (confidential information).
(i) Counterparts: This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which taken together will constitute one and the same Agreement.
Delivery of an executed counterpart of this Agreement by electronic transmission will have the same force and effect as the delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by electronic transmission will also deliver an original executed counterpart, but the failure to do so will not affect the validity, enforceability or binding effect of this Agreement.
(j) Binding Effect: This Agreement will be binding upon and will enure to the benefit of the parties and their respective successors and permitted assigns; “successors” includes any corporation resulting from the amalgamation of any party with any other corporation. (k) Applicable only in the United States: IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT: Federal law requires the Bank to obtain, verify and record information that identifies each person or business that opens an account, in order to help the government fight the funding of terrorism and money laundering activities. To process the application the Bank must have the Customer’s and each Cardholder’s name, street address, and other identifying information, and the Bank may ask for identifying documents from the Customer and each Cardholder as well.
(l) Safeguarding personal information: To learn more about how we collect, use, disclose and safeguard your personal information, your choices, and the rights you have, please see our Privacy Code (available at bmo.com/privacy, or from any of our branches). If you are a California resident, to learn more about how we collect, use, disclose and safeguard your personal information, and what rights you may have under the California Consumer Privacy Act, you can review our policy and disclosure at https://www.bmo.com/ccpapolicy.
(m) Applicable only in the Province of Quebec: It is the express wish of the parties that this Agreement and any related documents be drawn up in the English language. Les parties confirment leur volonté expresse que la présente convention ainsi que tous les documents s’y rattachant soient rédigés en anglais.
(The balance of this page is intentionally left blank; the signature page follows) #17..
- 1053 -
BMO Corporate Card Agreement
The parties have executed and delivered this Agreement as of the date first set out above and the parties further agree that this Agreement is in effect as of the Effective Date.
CITY OF MODESTO
Per:
[Name]
[Title]
Per:
[Name]
[Title]
BANK OF MONTREAL
Per:
If the Program features selected in Schedule 1
include any Canadian Card products under the
Canadian Program, then BMO is a party to this
Agreement and is required to execute the
Agreement.
Name
Title
BMO BANK N.A.
Per:
If the Program features selected in Schedule 1
include any U.S. Card products under the U.S.
Program, then BMO U.S. is a party to this
Agreement and is required to execute the
Agreement.
Stefan Roy
Director, Account Management
#17..
- 1054 -
BMO Corporate Card Agreement
SCHEDULE 1
PROGRAM FEATURES AND TERMS REGARDING NOTICE
(1) Program Features: Insert a for each product type and option selected.
BILLING OPTIONS CARD
CURRENCY Central Billed Individual Billed
CARD PRODUCTS
CDN$ US$
CASH
ADVANCES
Selected
Paper
Statements
Selected
Paper
Statements
V-PAYO
BMO FLEX REWARDS
CORP. COLLECT
CANADIAN PROGRAM
T&E Card (Corp.1)
T&E Card (J&S1)
One Card (Corp.1)
One Card (J&S1)
Fleet Card
U.S. PROGRAM
(Mastercard)
One Card (Corp.1)
One Card (J&S1)
Fleet Card
U.S. PROGRAM
(Visa)
One Card (Corp.1)
1 “Corp” refers to Corporate Liability and “J&S” refers to Joint and Several Liability.
Customer Credit Limit: Canadian Program: N/A
U.S. Program: U.S.$ 1,800,000.00
Payment Due Date: For all Cards
(The Customer can elect to make earlier payments): 27 days Effective Date: July 1, 2026
#17..
- 1055 -
BMO Corporate Card Agreement
(2) Notice
(a) The Bank will send all notices and correspondence pertaining to Routine Matters to a Program Administrator via one of the following: e-mail, letter, or courier. (b) For all notices pertaining to matters other than Routine Matters, the following terms apply:
(i) The Bank will send Change Notices to a Program Administrator via one of the following:
e-mail, letter, or courier.
(ii) Any other notice or other communication by one party to another under this Agreement will be in writing and delivered by hand or sent by courier, or e-mail at the addresses set forth below and will be deemed to have been received by the addressee: (i) if delivered by hand or by courier, on the day delivered or, if not a Business Day, on the next Business Day; and (ii) if transmitted by email and receipt is confirmed prior to 3:00 p.m. ET on a Business Day, on such Business Day or, in any other case, at 10:00 a.m. ET on the Business Day next following the date of transmission.
(iii) A party may give notice of a change of address for the purposes of this section in the manner provided above, and thereafter any notices or communication will be given to that party at such changed address.
If to BMO:
Bank of Montreal
Client Services Department
P.O. Box 3200 RPO Streetsville
Mississauga, Ontario
L5M 0S2
Email address: [email protected]
If to BMO US:
BMO Bank N.A.
Client Services
P.O. Box 6138
Carol Stream, Illinois
60197-6138
Email address: [email protected]
If to the Customer:
Name: City of Modesto
Address (line 1): Attn: Director of Finance
Address (line 2): P.O. Box 642
Address (line 3): Modesto, CA 94104
Email address: DeAnna Christensen <[email protected]> (3) Customer’s Head Office
Is the address set out in section 2 above the Customer’s head office? YES If the response is no, then insert the Customer’s head office address below:
Address (line 1):
Address (line 2):
Address (line 3):
#17..
- 1056 -
BMO Corporate Card Agreement
SCHEDULE 2
BILLING INFORMATION AND OPTIONS,
CUSTOMER SERVICE, DISPUTE SETTLEMENT PROVISIONS, V-PAYO, AND OTHER PAYMENT SOLUTIONS (1) Billing Information and Options
(a) Each of the following applies to a Customer Account Statement:
(i) The Customer Account Statement shows the aggregate outstanding balance of the Customer Account, which is equal to the sum of all amounts owing in respect of each Card Account Statement.
(ii) The Customer may choose to have one or more Customer Account Statements for each of the Canadian Program and the U.S. Program. If the Bank issues more than one Customer Account Statement, the aggregate amount owing by the Customer to the Bank is the sum of all Customer Account Statements issued.
(iii) Details of Charges are only set out on the Card Account Statement. (b) The Bank offers the following billing options described below:
(i) Central billing option: the Customer pays the Bank the balance of the Customer Account Statement (the central billing option always applies to Non-Personalized Cards); (ii) Individual billing option: the Customer elects that each Cardholder will pay the Bank the balance of their Card Account Statement on behalf of the Customer; or (iii) Customized Centralized Billing: the Customer may on at least 30 days advance written notice request that the Bank charge the Customer Account (for payment by the Customer) certain fees or other Charges that would otherwise be payable by a Cardholder with an individual billing option. Any request will be effective at the beginning of the applicable Cardholder’s billing cycle following the notice period in this subsection.
(c) With respect to the delivery of Statements:
(i) The Bank will deliver all Statements by posting them on the Program Website. The Customer may also choose to have paper copies of Card Account Statements mailed to Cardholders.
(ii) Each Program Administrator will have access to the Program Website, where Card Account Statements and Customer Account Statements can be accessed. (iii) Each Program Administrator may allow a Cardholder access to the Program Website for the purpose of viewing the Card Account Statement for that Cardholder’s Card Account. #17..
- 1057 -
BMO Corporate Card Agreement
(2) Customer Service and Dispute Settlement Procedures
(a) Service Level Timelines
Absent technical or other issues beyond the Bank’s control, the Bank will endeavor on a commercially reasonable basis to process the following types of requests within the time period specified:
Description
Processing Time
(Calculated from the time the Bank Receives
the Request)
Card Cancellation – assisted by
a customer service representative Immediate
Card Cancellation – self-serve
through the Program Website Immediate
Card Replacement – standard 5 – 10 Business Days
Card Replacement – emergency 2 Business Days
(b) Lost or Stolen Cards
The Customer and each Cardholder will notify the Bank as soon as it is aware that a Card is lost, stolen or missing and, if required, request a new Card. Upon receipt of the notice, the Bank will cancel the missing Card.
(c) Dispute Settlement Procedures
(i) Transactions involving disputes between the Customer and a Vendor are to be handled pursuant to section 14(b).
(ii) Within the Statement Review Period, the Customer or Cardholder will report to the Bank all disputed Charges. The Bank will then credit the appropriate Card Accounts the amount of the disputed Charges and commence an investigation with respect to those Charges.
(iii) After the Bank investigates the disputed Charges, the Bank will re-post any valid Charges to the appropriate Card Accounts.
(3) V-PAYO
(a) Overview
(i) The Customer selects which Vendors participate in V-PAYO. A Customer approved Vendor must agree to participate in V-PAYO.
(ii) The Customer and each Vendor will agree on all details with respect to the goods and services that will be paid for through V-PAYO. Any disputes with respect to the approved #17..
- 1058 -
BMO Corporate Card Agreement
goods and services will be resolved directly by the Customer and the Vendor. (iii) Vendor profiles may be set up by the Customer or BMO, who may use third-party service providers in this process. When the Customer wants to make a V-PAYO Transaction, it will transmit an electronic file in the format, and containing the information, specified by BMO.
(b) Payments
(i) With respect to each V-PAYO Transaction:
A. When the Bank receives instructions to do so from the Customer, the Bank will send the Vendor a secure email, to an email address specified by the Vendor. The email will notify the Vendor that the Customer has approved an invoice for payment and that the Vendor may charge a specified Card Account for a specific amount approved by the Customer (the “Approved Amount”).
B. The Vendor may then charge that Card Account for the Approved Amount.
C. The Bank will authorize the V-PAYO Transaction only if the amount that the Vendor is attempting to charge to the specified Card Account equals the Approved Amount.
D. The Customer may not take any steps that would result in the V-PAYO Transaction not being authorized.
E. The V-PAYO Transaction will be treated as a Purchase under the Agreement. (c) Amendment or Termination of V-PAYO
Notwithstanding anything to the contrary in the Agreement, the Bank may amend or delete the VPAYO service upon 30 days prior written notice to the Customer. (4) Other Payment Solutions
Bank may from time to time introduce and provide additional options for Vendor Payment Solutions and other payment solutions (collectively “Payment Solutions”). Customer may be required to agree to additional terms and conditions relating to the selected Payment Solutions, where such terms and conditions may be set by the Bank or a third-party providing a Payment Solution. Such third-party terms and conditions will not modify terms of this Agreement or Customer’s obligations to the Bank under this Agreement. #17..
- 1059 -
BMO Corporate Card Agreement
SCHEDULE 3
PRICING AND FEES
PROGRAM
Canadian U.S.
# CHARGE DESCRIPTION
CDN$
Cards
($=CDN$)
US$
Cards
($=US$)
($=US$)
1. Annual Fee (per Card per
Year): Standard Card: Waived Waived Waived
2. BMO Flex Rewards (per
Card per Year*)
Participation in program for eligible
One Cards
N/A N/A $90.00
Paper Statement: $3.00 $3.00 $3.00
3. Statements
(per Card per month): Electronic Statement: Included Included Included At a BMO branch or ATM: 2%** 2%** 4%** 4.
Cash Advance Fees:
Not at a BMO branch or ATM: 4%** 4%** 4%**
5. Late Fees:
1.75% 1.75% 1.75%
6. Foreign Transaction Fee: 2.5% 2.5% 2.0%
7. Dishonoured Payment: $29.00 $29.00 $29.00
Program Website: Waived Waived Waived
Standard File Set-Up Fee: $500 $500 $500
New Flat File Automation Fee: $3,000 $3,000 $3,000
Custom File Programing and
Reports (subject to a minimum 10
hour charge):
$150/hr $150/hr $150/hr
8. Technology Fees:
Third Party Integration (Standard
File) Set-Up Fee: $500 $500 $500
#17..
- 1060 -
BMO Corporate Card Agreement
PROGRAM
Canadian U.S.
# CHARGE DESCRIPTION
CDN$
Cards
($=CDN$)
US$
Cards
($=US$)
($=US$)
Technology (Cont.) Custom Training Services: TBD TBD TBD V-PAYO Card Only Implementation
Fee:
$1,500.00 $1,500.00 $1,500.00
V-PAYO Card Plus Implementation
Fee:
$2,500.00 $2,500.00 $2,500.00
New Rush Card/ Re-issued Rush
Card:
TBD TBD TBD
9. Rush Card Fees1
Sales Slip Documentation Transaction Receipt Retrieval $3.00 $3.00 $3.00 BMO Corporate Card Liability
Waiver Program:
10. Liability Waiver Programs: Included Included N.A.
MasterCoverage Liability Protection
Program:
N.A. N.A. Included
VisaCoverage Liability Protection
Program:
N.A. N.A. Included
Annual Charge volume is $3 million
or more1: the customer logo is
available in white at no charge.
Waived Waived Waived
Annual Charge volume is $25
million or more1: fully customized
Card art is available as follows:
(i) one-time set-up fee $1,495 $1,495 $1,495
11. Custom Card Fees
(Not available if the annual
Charge volume is less than
$3 million1):
(ii) each press proof requested $1,500 $1,500 $1,500
* Non-Personalized Cards are not eligible to earn rewards on BMO Flex Rewards. ** Refers to a percentage of the amount of the cash advance. Refers to a percentage of the amount of the unpaid balance in accordance with the terms of the Agreement. 1 The dollar amount is in US$ for the US Program and CDN$ for the Canadian Program and will be disclosed at the time of the request.
#17..
- 1061 -
BMO Corporate Card Agreement
SCHEDULE 4
DELIVERY OF INSURANCE DOCUMENTS
Distribution Protocol
1. The Bank may post to the Program Website Insurance Documents that are applicable to the Customer. The Program Administrator will: (i) receive an email advising of the posting of the Insurance Documents; and (ii) provide the Bank’s notice to all Cardholders so that they may directly access the Insurance Documents from the Program Website. The Customer acknowledges that they have received the insurance product summary and agrees with the terms and conditions therein.
2. Where the Bank has sufficient Cardholder information, the Bank may endeavor to obtain the Cardholder’s consent to the Electronic Distribution of Insurance Documents (such consent, a “Consent”). If the Cardholder has not given or otherwise withdrawn their Consent, then the following terms apply:
(a) If the Bank has the Cardholder’s mailing information, the Bank may mail Insurance Documents directly to that Cardholder.
(b) If the Bank does not have the Cardholder’s mailing information, the Customer will act as that Cardholder’s agent (through the Program Administrator) for the purposes of receipt and distribution of Insurance Documents to that Cardholder. In such capacity as agent: (i) where the Cardholder has not expressed a preference to the Bank that they want to receive a hard copy of the Insurance Documents, the Customer agrees to the Electronic Distribution of Insurance Documents; and (ii) where the Cardholder has expressed a preference to the Bank that they want to receive a paper copy of the Insurance Documents, the Bank will provide the Program Administrator with paper copies of the Insurance Documents for distribution to that Cardholder.
3. In addition to the Electronic Distribution of Insurance Documents, the Bank: (i) may provide Insurance Notices on Statements; and (ii) will at any time upon request provide the Program Administrator with paper copies of any Insurance Documents.
Miscellaneous Terms
4. Any Insurance Documents received through Electronic Distribution will be considered “in writing” and to have been signed and delivered by the Bank as though it were an original document.
5. The Customer and each Cardholder may change their Insurance Document preference from electronic to paper copy at any time by contacting the Bank.
6. Insurance Documents may remain posted to the Program Website and will be available until the date that the Agreement is terminated. It is the responsibility of the Customer and each Cardholder to retain a copy of each Insurance Document by saving or printing a copy while it is available to view.
7. The Bank may provide paper copies of Insurance Documents if the Bank is unable to provide the Insurance Documents through Electronic Distribution or for any other reason.
Insurance Product Disclosure (Quebec Residents ONLY):
The Customer acknowledges having received and having had opportunity to review all applicable Insurance Product Summaries for insurance products provided with Cards prior to signing this agreement. #17..
- 1062 -
BMO Corporate Card Agreement
SCHEDULE 5
REBATE SCHEDULE
1. Definitions and Interpretations.
(a) Capitalized terms that are not defined in this schedule have the meanings given to them in the Agreement.
(b) As used in this schedule, the following terms are defined as follows:
“Account” means the Customer Account (which includes any sub-account of the Customer Account) established under the Agreement.
“Annual NTV” means for any given Year, the NTV which is achieved in that Year with Cards issued pursuant to the Agreement as such calculation may be modified by the terms set out in section 3 of this schedule.
“Basis Point” or “bp” means a basis point, and one Basis Point (1 bp) equals 0.0001 or 0.01%.
“Customer Held Days” or “CHDs” means for any given Year the average number of days between the time that billing statements are generated and the time that the Bank receives payment.
"Early Termination Event" means the termination for any reason whatsoever of the Agreement before the completion of any Year in this Agreement. “Minimum Annual NTV” means U.S. $1,000,000.
“NTV” means the aggregate net transaction volume, which is calculated as follows:
the aggregate sum of all Purchases minus the aggregate sum of each of the following Charges: (i) all purchase credits; (ii) Cash Advances; (iii) write-offs as a result of each of the following: credit losses and fraudulent transactions; and (iv) charge volume incurred in the Warehouse interchange category, as it may be defined by the Card Networks from time to time.
“Rebate” means the rebate payable by the Bank in respect of the Agreement pursuant to the terms and conditions set out in this schedule.
“Rebate Table” means the tiered rebate table set out in section 5 of this schedule, which sets out for any given Year, in each row heading the Annual NTV and in each column heading the Customer Held Days (“CHDs”) for the Agreement. #17..
- 1063 -
BMO Corporate Card Agreement
“Year” except for the first contract year which will be a period of six months commencing on July 1, 2026 and ending on December 31, 2026, means any twelve month period commencing on January 1, 2027 and ending on December 31 in the same calendar year and “Yearly” will have a corresponding meaning. (c) All monetary amounts refer to U.S. dollars unless otherwise specified. (d) Any reference to time will refer to Eastern Time.
2. General.
(a) This schedule is effective as of 12:00 a.m. on the Effective Date. (b) Upon coming into effect, the incentives in this schedule supersede and replace any and all prior incentive or rebate agreements between the Customer and the Bank in connection with any corporate card program.
(c) Should an Early Termination Event occur, the incentives in this schedule will concurrently terminate with the termination of the Agreement subject to the provisions in Section 3(f) below.
3. Rebates.
(a) Subject to each of the terms set out in this section 3, and in accordance with the Rebate Table, the Bank will pay the Customer any Rebate in quarterly installments within sixty (60) days of the end of each three (3) month quarter. (b) Rebates paid to the Customer will be calculated and paid as follows:
(i) Quarterly
A. In quarterly installments based on the year-to-date cumulative NTV, CHDs and projected Annual Rebate Rate. The Bank will determine the projected Annual Rebate Rate by annualizing the year-to-date (YTD) NTV in conjunction with the average CHDs in effect for each quarter. Notwithstanding the foregoing, the Bank may adjust the projected Annual Rebate Rate based upon additional information or data indicating that annualized NTV will not be representative of actual annual NTV for purpose of calculating the rebate.
B. Each quarter shall run for three (3) consecutive calendar months. At the end of each Year, the Bank will true-up the final quarter’s rebate payment based on actual YTD rebate payments paid. If the YTD true-up results in a lower rebate earned, the Bank will reduce the current quarter’s rebate to reflect the actual rebate earned. Customer shall refund any rebate overpayment to the Bank within 60 days of the end of the contract Year. #17..
- 1064 -
BMO Corporate Card Agreement
(ii) Based on the calculations set out in section 3(b)(i) of this schedule, the Rebate for the applicable Year for the Agreement will be determined by multiplying:
(A) the Annual NTV by (B) the rebate in Basis Points applicable to the Agreement (the “Basis Point Rebate”), where the Basis Point Rebate will be determined by the intersection in the Rebate Table of the row that corresponds to the Annual NTV with the column of the Rebate Table that corresponds to the CHDs for the Agreement.
(iii) Large Ticket Spend: When the Rebate is calculated, Large Ticket Spend will be included to determine the applicable Annual NTV tier at which the Rebate will be paid but the Rebate earned on Large Ticket Spend volume will be paid at 75 basis points (bps). Large Ticket Spend is currently defined by the relevant Card Network as any transaction submitted by a Merchant Account for the Commercial Large Ticket discount rate; has a Merchant Category Code assigned other than airline, lodging, vehicle rental, passenger railway, or restaurant; and with respect to Transactions within the jurisdiction in which the Card was issued, the Commercial Large Ticket enhanced data requirements are satisfied (Level III data is provided); for the avoidance of doubt, Transactions made between MCI regions (for which Level III data is not provided) which would constitute Large Ticket Spend within the Merchant’s jurisdiction will constitute Large Ticket Spend by the Customer. (iv) International, Charity and Data Rate III Transactions: Transactions defined as International, Charity and Data Rate III will be based upon the interchange rates defined by the relevant Card Network. International transactions are defined as any transaction incurred in a country other than the country of card issuance.
Charity transactions are defined as any transaction submitted by a merchant using a charity discounted rate as defined by the merchant category code. Data Rate III is defined by the relevant Card Network and is only for U.S. Programs. For all transactions on cards in a U.S. Program passed by the merchant(s) through the relevant Card Network classified as the following transaction types: Data Rate III, International (standard and other non-large ticket), and Charities, the Bank will pay 100 basis points (bps).
(v) Card Network negotiated supplier rates: The Bank will pay 0 basis points on transaction volume derived from Card Network negotiated supplier rates. (vi) Custom Rate V-PAYO Volume: Transaction volume derived from suppliers enrolled using custom interchange rates will be paid out at a reduced basis point rebate. If applicable, Customer will be provided terms of such as an addendum to this Schedule 5, the terms of which are incorporated by reference herein. Transaction volume associated with custom interchange rates, including transaction volume from suppliers enrolled using custom interchange rates, will be included to determine the qualifying Tier for Annual NTV which the Earned Incentive Rate will be selected. #17..
- 1065 -
BMO Corporate Card Agreement
(vii) Extend for BMO Virtual Card volume: Transaction volume incurred on a Virtual Card issued through third-party Extend (“Extend Volume”) as a Vendor Payment Solution will be included to determine the applicable Annual NTV tier at which the Rebate will be paid but the Rebate earned on Extend Volume will be paid at 75% of the Earned Incentive Rate. (viii) The Card Network definition of any transaction type may change at any time without notice and will be adjusted accordingly to match the definition for rebate calculations. The Bank does not control the definitions of transaction type. (ix) Early Payment Incentive: Bank will add 0.50 basis points (bp) to the Early Payment Incentive Rate for every CHD less than 14 that the Customer and their Cardholders remit payment. Bank will subtract 1 basis point (bp) from the Earned Incentive Rate for every CHD greater than 14 up to 30 that Customer and their Cardholders remit payment. If average annual CHDs exceed 30, no Rebate will be paid. The Earned Incentive Rate is the Basis Point Rebate adjusted for the Early Payment Incentive.
(x) For avoidance of doubt, incentives paid at fixed amounts under this Section 3(b), which may include but are not limited to, the following categories of transactions, are not subject to (a) adjustment resulting from Early Payment Incentive or (b) adjustment resulting from a change in interest rate under Section 3(e) of this Schedule 5:
A. Large Ticket Spend
B. International Transactions
C. Charity Transactions
D. Data Rate III Transactions
E. Card Network negotiated supplier rates
F. Custom Rate V-PAYO Volume, if applicable
G. Extend for BMO Virtual Card Volume
(c) Rebates are paid in U.S. dollars. For the purpose of calculating the Rebate, the Bank will convert the Canadian dollar volume to U.S. dollar volume at the end of each Year using a twelve month average exchange rate.
(d) In order to qualify for any Rebates in any particular Year, (i) the Annual NTV must equal or exceed the Minimum Annual NTV in that Year; #17..
- 1066 -
BMO Corporate Card Agreement
(ii) the Account must be in good standing at all times throughout the Year by the Customer timely paying all amounts due on the Account each month in accordance with the Agreement and otherwise not in default; (iii) the Customer must have actively used the Account during the entire Year without reduction in NTV due to use of, or transition to, a competing card or service; and
(iv) neither Party has terminated the Agreement before the end of a Year, subject to Section 3(f) of this Schedule 5.
(e) The Rebate Schedule is subject to change in each of the following situations:
(i) If experience or cost of funds varies significantly; (ii) As a result of a change by the Card Network to its interchange rates; (iii) For every 50 bps increase in the Federal Reserve’sovernight rate, each Basis Point Rebate will be reduced by 4 bps; and
(iv) For every 50 bps decrease in the Federal Reserve’s overnight rate, each Basis Point Rebate will be increased by 4 bps;
(v) If a change in laws or regulations is made on or after the Effective Date that affects interchange rates, so that it makes it unlawful, impractical or impossible to maintain incentives and Rebates in this Schedule 5. (f) The following terms apply to partial Years:
(i) No Rebate will be paid for any partial Year in each of the following situations:
A. If the Customer causes an Early Termination Event to occur.
B. If the Bank terminates the Agreement pursuant to Section 13 (“Term and Termination”) (b)(ii) – (iv).
(ii) In the event that the Customer received any quarterly payment(s) of a Rebate for a partial Year subject to Section 3(f)(i), the Customer will repay all Rebate received for a partial Year within thirty (30) days of termination. (iii) If the Agreement is terminated for any other reason by the Bank, the Customer is entitled to a Rebate for a partial Year based on the actual NTV achieved by the Customer as of the date of termination.
A. The Rebate earned in a partial Year will be calculated in accordance with the terms and conditions of this Agreement provided that an #17..
- 1067 -
BMO Corporate Card Agreement
annual projection of what the Aggregate Annual NTV would have been based on the actual NTV achieved as of the date of termination will be calculated by the Bank in order to establish the appropriate Rebate tier (the “Estimated Tier”). The Basis Point Rebate at the Estimated Tier will be applied to the Customer’s actual NTV as of the date of termination in order to determine the Rebate.
(g) The Bank reserves the right to modify or cancel the rebate program, including the terms of the Rebate Table, set out in this schedule within thirty (30) days of each annual anniversary date of the Agreement upon written notice to the Customer. (h) The Rebate earned will be reduced dollar for dollar by Yearly credit losses incurred by the Bank. Currently credit losses are declared on all amounts due on an Account when any portion of the Account becomes one hundred eighty (180) days past due, if the Customer declares bankruptcy and if a Cardholder passes away or declares bankruptcy. The timing of when credit losses are declared may change from time to time. The Bank will notify the Customer of any such change. In the final Year of the Agreement, any Rebates that are subject to reduction for credit losses will be paid eight (8) months after the termination date of the Agreement to permit calculation of final credit losses. The Bank will provide written notice to the Customer of any credit losses with sufficient detail to substantiate such credit losses. The Bank will deduct credit losses up to the total amount of the Rebate that may be due. (i) If Customer charges its clients for amounts that are charged to Cards, Customer shall make such disclosures to its clients regarding the financial incentives that are set forth in this schedule as are legally required, customary practice in Customer’s industry, or that Customer reasonably deems necessary and appropriate, subject to the terms and conditions hereof.
4. Offset.
In respect of any amount payable in accordance with this schedule, the parties agree that the Bank may in its discretion offset any amounts owing by it to the Customer against any amounts owing by the Customer to the Bank.
5. Rebate Table.
The rebate table is as follows:
REBATE TABLE
ANNUAL NTV US ONE CARD
BASIS POINT REBATE
PER CHDs
US VPAYO
BASIS POINT REBATE
PER CHDs
#17..
- 1068 -
BMO Corporate Card Agreement
14 Days 14 Days
$1,000,000 100 100
$2,500,000 135 135
$5,000,000 160 160
$7,500,000 170 170
$10,000,000 180 180
6. Contract Bonus.
Bank will pay Customer a one-time contract bonus of $25,000 (the “Contract Bonus”) for signing this Agreement and for meeting the Bonus Minimum Volume (as defined below). The Contract Bonus will be paid within ninety (90) days of the Effective Date hereof. For any contract Year in the first 5 Years of this Agreement in which Annual NTV does not reach a minimum of $6,000,000 (the “Bonus Minimum Volume”), Customer shall repay to Bank a prorated portion of the Contract Bonus. Proration will occur as follows: Customer may retain 20% of the Contract Bonus paid to it for each completed contract Year of the first 5 Years of the Agreement, provided, however, that any contract Year in which the Bonus Minimum Volume is not incurred, the percentage of the Contract Bonus which would have otherwise been retained by Customer for such Year shall be reduced to the percentage of the Bonus Minimum Volume actually incurred. The amount so reduced from the percentage portion shall be deducted from other incentives earned. If such incentives are not sufficient, Bank shall send a statement to Customer for such amounts as may be due which will be due and payable by Customer within thirty (30) days.
INTERNAL BMO REFERENCE # CBAN171369City
#17..
- 1069 -
302683358.3
SUPPLEMENT NO. 5, DATED JUNE 1, 2026, TO OFFICIAL STATEMENT, DATED AUGUST 26, 2008 NOT A NEW ISSUE RATINGS:
See “RATINGS” herein
$65,170,000
MODESTO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS
SERIES 2008
Dated: Date of Original Delivery Price: 100% CUSIP† 607796BU2 Due: September 1, 2033 (August 28, 2008)
This Supplement No. 5 to Official Statement (this “Supplement”) sets forth certain information supplementary to that information contained in the Official Statement dated August 26, 2008, as supplemented on February 25, 2014, June 22, 2016, June 4, 2019 and May 11, 2023 (together, the “Original Official Statement”), relating to the Modesto Public Financing Authority Lease Revenue Refunding Bonds Series 2008 (the “2008 Bonds”). The 2008 Bonds were issued pursuant to an Indenture, dated as of August 1, 2008, by and between the Modesto Public Financing Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., as Trustee, in order to provide funds to (i) refund certain bonds previously issued by the Authority, (ii) fund the Reserve Fund for the 2008 Bonds and (iii) pay the costs of issuance of the 2008 Bonds.
Information with respect to the 2008 Bonds is contained in the Original Official Statement, as supplemented by this Supplement. This Supplement should be read together with the Original Official Statement (a copy of which is attached hereto as Appendix A and incorporated herein by reference). To the extent that the information in this Supplement conflicts with the information in the Original Official Statement, this Supplement shall govern. No attempt has been made to update the Original Official Statement except as specifically set forth in this Supplement. Unless otherwise defined in this Supplement, all terms used herein shall have the same meanings as those terms in the Original Official Statement.
The 2008 Bonds were issued in and are currently in a Weekly Mode, and interest on the 2008 Bonds accrues at the Weekly Rate. Regularly scheduled payments of the principal of and interest on the 2008 Bonds is supported by an irrevocable, direct-pay letter of credit (the “Letter of Credit”) issued by BMO Bank N.A. (formerly known as BMO Harris Bank N.A.) (the “Bank”), successor in interest to Bank of the West, pursuant to the terms of a Reimbursement Agreement, dated as of June 1, 2019, by and among the Authority, the City of Modesto (the “City”) and the Bank, upon which Letter of Credit the Trustee is instructed to draw whenever any such amount is payable on the 2008 Bonds. The Trustee may also draw funds under the Letter of Credit to pay the purchase price of 2008 Bonds tendered for payment and not remarketed to the extent other moneys are not available therefor. The Letter of Credit with respect to the 2008 Bonds had an stated expiration date of June 8, 2026. The Authority has requested the Bank to extend the stated expiration date to June [___], 202[__], and the Bank intends to do so. See “CREDIT FACILITY” and “INFORMATION CONCERNING THE BANK” herein.
TD Securities (USA) LLC currently serves as remarketing agent for the 2008 Bonds (the “Remarketing Agent”). [TD Securities (USA) LLC Logo]
__________________
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Authority, the City, its Municipal Advisor or the Remarketing Agent is responsible for the selection or use of these CUSIP numbers and no representation is made as to their correctness on the 2008 Bonds or as indicated above. The CUSIP number for a specific bond is subject to being changed after the issuance of the bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of such bonds.
#17..
- 1070 -
i
302683358.3
TABLE OF CONTENTS
Page
INTRODUCTION .........................................................................................................................................1 CREDIT FACILITY......................................................................................................................................2 INFORMATION CONCERNING THE BANK ...........................................................................................5 RATINGS ......................................................................................................................................................6 MISCELLANEOUS ......................................................................................................................................6 APPENDIX A – COPY OF OFFICIAL STATEMENT, DATED AUGUST 26, 2008, AS SUPPLEMENTED ON FEBRUARY 25, 2014, JUNE 22, 2016, JUNE 4, 2019 AND MAY 11, 2023 ...............................................................................................................A-1 #17..
- 1071 -
1 302683358.3
SUPPLEMENT NO. 5, DATED JUNE 1, 2026, TO OFFICIAL STATEMENT, DATED AUGUST 26, 2008
RELATING TO
$65,170,000
MODESTO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS
SERIES 2008
INTRODUCTION
The purpose of this Supplement No. 5 to Official Statement (this “Supplement”) is to supplement the Official Statement dated August 26, 2008, as supplemented on February 25, 2014, June 22, 2016, June 4, 2019 and May 11, 2023 (together, the “Original Official Statement”), relating to the $65,170,000 original principal amount of Modesto Public Financing Authority Lease Revenue Refunding Bonds, Series 2008 (the “2008 Bonds”). The 2008 Bonds are currently outstanding in the aggregate principal amount of $41,770,000. This Supplement provides information concerning the extension to June [__], 202[__] of the stated expiration date of the irrevocable direct-pay letter of credit (the “Letter of Credit”) issued by BMO Bank N.A. (formerly known as BMO Harris Bank N.A.) (the “Bank”), successor in interest to Bank of the West, pursuant to the terms of a Reimbursement Agreement, dated as of June 1, 2019, as amended by an Amendment No. 1 to Reimbursement Agreement (as so amended, the “Existing Reimbursement Agreement”), each by and among the Bank, the Modesto Public Financing Authority (the “Authority”) and the City of Modesto (the “City”), to provide for the payment of principal, purchase price and optional and mandatory sinking fund redemption price of and interest on the 2008 Bonds. The Letter of Credit currently has a stated expiration date of June 8, 2026.
The 2008 Bonds were issued pursuant to an Indenture, dated as of August 1, 2008, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as Trustee, in order to provide funds to (i) refund certain bonds previously issued by the Authority, (ii) fund the Reserve Fund for the 2008 Bonds and (iii) pay the costs of issuance of the 2008 Bonds.
In connection with the extension of the Letter of Credit’s stated expiration date by the Bank, the Existing Reimbursement Agreement will be amended pursuant to an Amendment No. 2 to Reimbursement Agreement (the “Amendment No. 2” and the Existing Reimbursement Agreement, as amended by Amendment No. 2, the “Reimbursement Agreement”). See “CREDIT FACILITY” herein.
This Supplement also provides information about the Bank, which has been provided by the Bank.
See “INFORMATION CONCERNING THE BANK” below.
The Bank has provided only the information related to itself set forth under the heading “INFORMATION CONCERNING THE BANK” for inclusion in this Supplement and has not provided any other information for this Supplement. No representation is made herein as to the accuracy or adequacy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof, or that the information given below or incorporated herein by reference is correct as of any time subsequent to its date. The Bank has not (i) independently verified or reviewed, (ii) made any representation regarding, nor (iii) accepted any responsibility for the accuracy or completeness of, this Supplement or the Original Official Statement or any information or disclosure contained herein or therein, other than solely with respect to the information with respect to itself set forth in this Supplement under the heading “INFORMATION CONCERNING THE BANK.”
#17..
- 1072 -
2 302683358.3
Information with respect to the 2008 Bonds is contained in the Original Official Statement, as supplemented by this Supplement. This Supplement should be read together with the Original Official Statement (a copy of which is attached hereto as Appendix A and incorporated herein by reference). To the extent that the information in this Supplement conflicts with the information in the Original Official Statement, this Supplement shall govern. No attempt has been made to update the Original Official Statement except as specifically set forth in this Supplement. Unless otherwise defined in this Supplement, all terms used herein shall have the same meanings as those terms in the Original Official Statement.
CREDIT FACILITY
POTENTIAL PURCHASERS OF THE 2008 BONDS SHOULD BASE ANY DECISION WITH RESPECT TO THE PURCHASE, HOLDING OR TENDER OF SUCH 2008 BONDS SOLELY UPON THE CREDIT OF THE BANK AND NOT THE CITY OR THE AUTHORITY.
NEITHER THE CITY NOR THE AUTHORITY HAS OBLIGATED ITSELF TO PURCHASE THE 2008 BONDS IN THE EVENT OF A MANDATORY OR OPTIONAL TENDER. CERTAIN
INFORMATION INCLUDED IN THIS SUPPLEMENT WITH RESPECT TO THE CITY AND THE AUTHORITY IS FOR INFORMATIONAL PURPOSES ONLY.
Reference is made to each of the Letter of Credit and the Reimbursement Agreement in its entirety for the detailed provisions thereof, copies of which are available for inspection from the Trustee.
Credit Facility
The Bank has established, at the request and for the account of the City, the Letter of Credit in favor of the Trustee. The Letter of Credit authorizes the Trustee to draw on the Letter of Credit in an aggregate amount not exceeding $42,236,909.00 (as reduced or reinstated from time to time in accordance with the provisions of the Letter of Credit, the “Stated Amount”) of which an amount not exceeding $41,770,000.00 (as reduced or reinstated from time to time in accordance with the provisions of the Letter of Credit, the “Principal Portion”) may be drawn with respect to payment of the unpaid principal of or the portion of the purchase price corresponding to the unpaid principal of the 2008 Bonds and an amount not exceeding $466,909.00 (as reduced or reinstated from time to time in accordance with the provisions of the Letter of Credit, the “Interest Portion”) may be drawn upon with respect to payment of interest actually accrued and unpaid on, or the portion of the purchase price corresponding to interest actually accrued and unpaid on, the 2008 Bonds on or prior to their stated maturity date, but in no event more than interest accrued and unpaid on the 2008 Bonds calculated at a maximum interest rate of 12% per annum (based on a year of 365 days) for the 34 days immediately preceding any drawing. The Stated Amount is comprised of the Principal Portion and the Interest Portion, as they may vary from time to time. The Letter of Credit is only available to be drawn upon with respect to 2008 Bonds bearing interest at a Daily Rate or Weekly Rate pursuant to the Indenture.
Drawings by the Trustee under the Letter of Credit and presentation of a reduction certificate by the Trustee to the Bank will reduce the Stated Amount available for subsequent drawings under the Letter of Credit, subject to reinstatement as provided in the Letter of Credit.
Upon extension, the Letter of Credit will expire at 4:00 p.m. (California time) on the date (the “Expiration Date”) which is the earliest of: (i) June [__], 202[__], unless extended by the Bank in its sole discretion (the “Stated Expiration Date”), (ii) the date on which the Bank honors a drawing which when added to all other drawings honored hereunder and not subject to reinstatement in the aggregate equals the Stated Amount, (iii) the first (1st) Business Day which is five (5) days after the date of the Bank’s receipt of a specified certificate from the Trustee stating that (x) the conditions precedent to the acceptance of an Alternate Credit Facility set forth in the Indenture have been satisfied and the Trustee has accepted an #17..
- 1073 -
3 302683358.3
Alternate Credit Facility, or (y) no 2008 Bonds remain outstanding under the Indenture or all 2008 Bonds remaining outstanding under the Indenture have been converted to bear interest at a Fixed Rate, Flexible Rate or Term Rate, (iv) the day the Bank delivers to the Trustee a specified certificate stating that an event of default under the Reimbursement Agreement has occurred and that the Letter of Credit has expired, or (v) the date when the Trustee surrenders the Letter of Credit to the Bank for cancellation. The Trustee has agreed in the Letter of Credit to surrender the Letter of Credit to the Bank, and not to make any drawing after (a) the Expiration Date, or (b) the date on which there are no 2008 Bonds outstanding under the Indenture. Funds under the Letter of Credit will be paid with the Bank’s own funds.
Reimbursement Agreement
General. The following summarizes certain provisions of the Reimbursement Agreement. The Reimbursement Agreement, among other things, sets the terms and conditions whereby the Authority and the City are required to repay to the Bank any amounts drawn by the Trustee under the Letter of Credit.
Among other things, the Reimbursement Agreement also provides for the payment or reimbursement to the Bank of certain specified fees, costs and expenses, affirmative and negative covenants to be observed on the part of the Authority and the City and certain indemnification obligations on the part of the Authority and the City. The Reimbursement Agreement will not secure the Trustee, the holders of the 2008 Bonds, or the 2008 Bonds.
For purposes of this summary, “Bankruptcy Law” shall mean Title 11, U.S. Code, as amended or supplemented, any successor statute thereto, or any similar Federal, state, or foreign law for the relief of debtors.
For purposes of this summary, “Related Documents” shall mean the Reimbursement Agreement, the related fee letter agreement, the Letter of Credit, the 2008 Bonds, the Indenture, the Lease Agreement, the Facilities Leases, the Remarketing Agreement, the Official Statement and the other documents, certificates and opinions executed and delivered in connection with issuance of the 2008 Bonds.
For purposes of this summary, “Successor Agency” means the City as the successor agency for the Redevelopment Agency of the City of Modesto as designated under Section 34173 of the California Health & Safety Code.
Events of Default. If any of the following events shall occur and be continuing, each such event shall be an “Event of Default” under the Reimbursement Agreement:
(a) The Authority or the City (by payment of Base Rental Payments or Additional Payments under the Lease Agreement) shall fail to pay when due any amount payable to the Bank under the Reimbursement Agreement or under the Lease Agreement (including any Base Rental Payment or Additional Payment) or under any of the Related Documents; or (b) Any provision of the 2008 Bonds or any other Related Document ceases to be valid and binding against the Authority, the City, the Successor Agency or the Financing Agency (as the case may be) or shall be declared null and void or the Authority, the City, the Successor Agency or the Financing Agency repudiates its obligations under the Reimbursement Agreement or any of the Related Documents or the pledge and assignment pursuant to the Reimbursement Agreement and pursuant to the Indenture shall for any reason cease to be fully enforceable with the priority required under the Reimbursement Agreement and under the Indenture; or
(c) The Authority, the City, the Successor Agency or the Financing Agency shall either (i) become insolvent or generally fail to pay, or admit in writing its inability to pay, its debts as they become #17..
- 1074 -
4 302683358.3
due; or (ii) voluntarily commence any proceeding or file any petition under the Bankruptcy Law or similar law seeking dissolution or reorganization or the appointment of a receiver, trustee, custodian or liquidator for itself or a substantial portion of its property, assets or business or to effect a plan or other arrangement with its creditors, or shall file any answer admitting the jurisdiction of the court and the material allegations of an involuntary petition filed against it in any bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt, or shall make a general assignment for the benefit of creditors, or shall consent to, or acquiesce in the appointment of, a receiver, trustee, custodian or liquidator for itself or a substantial portion of its property, assets or business; or (iii) take any action for the purpose of effectuating any of the foregoing; or
(d) Involuntary proceedings or an involuntary petition shall be commenced or filed against the Authority, the City, the Successor Agency or the Financing Agency under the Bankruptcy Law or similar law seeking the dissolution or reorganization of the Authority, the City, the Successor Agency or the Financing Agency or the appointment of a receiver, trustee, custodian or liquidator for the Authority, the City, the Successor Agency or the Financing Agency or of a substantial part of the property, assets or business of the Authority, the City, the Successor Agency or the Financing Agency, or any writ, judgment, warrant of attachment, execution or similar process shall be issued or levied against a substantial part of the property, assets or business of the Authority, the City, the Successor Agency or the Financing Agency, and such proceedings or petition shall not be dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded, within thirty (30) days after commencement, filing or levy, as the case may be; or
(e) Any judgments or arbitration awards are entered against the City, or the City enters into any settlement agreements with respect to any litigation or arbitration, in an aggregate amount of $500,000 or more in excess of any insurance coverage, provided that the insurer has issued a letter of responsibility for payment up to the amount of insurance coverage; or
(f) The City shall fail to make a payment on any debt to any person or entity payable from the City’s general fund in excess of $500,000 (measured in the case of any Swap, by the amount of any settlement amount that would be payable by the City if such Swap were terminated as of such date), or in connection with any credit the City has obtained from the Bank regardless of amount, or any interest or premium thereon when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such debt, or the City shall fail to perform or observe any term, covenant or condition in any agreement or instrument relating to any debt to any person or entity in excess of $500,000 (measured in the case of any Swap, by the amount of any settlement amount that would be payable by the City if such Swap were terminated as of such date) when required to be performed or observed, if the effect of such failure to perform or observe results in the acceleration, or ability to accelerate, the maturity of such debt (or, with respect to any Swap, which results in such Swap being terminated early or being capable of being terminated early); or
(g) Any default occurs under the Lease Agreement or any other Related Document, in each case after the passage of any notice and cure periods; or (h) The City or the Authority fails to meet the conditions of, or fails to perform (i) any term, covenant, condition or agreement on its part to be performed or observed under certain affirmative covenants set forth in the Reimbursement Agreement, or (ii) any term, covenant, condition or agreement on its part to be performed or observed not specifically referred to in any of the Events of Default, and such default (solely in the case of clause (ii)) is not cured within thirty (30) days after the Bank has given the City or the Authority, as applicable, written notice of such default; or #17..
- 1075 -
5 302683358.3
(i) Any of the City’s or the Authority’s representations or warranties made in the Reimbursement Agreement or in any statement or certificate at any time made or deemed made by or on behalf of the City or the Authority pursuant thereto or in connection therewith, and/or in any of the other Related Documents, is false or misleading in any material respect when made or deemed made; or (j) The ratings assigned to any long term, unenhanced general fund obligation of the City shall be withdrawn or suspended or otherwise unavailable for credit-related reasons or reduced below Baa1 by Moody’s Investors Service, Inc., BBB+ by S&P Global Ratings or BBB+ by Fitch Ratings, Inc. In the event of split ratings, the default will be determined by reference to the lowest rating; or (k) The leasehold interest of the Authority under either of the Parking Garage Facilities Lease or the City – County Administration Facilities Lease shall terminate; or (l) A moratorium shall have been declared with respect to the payment of the debts of the Authority or the City; or
(m) Any of the funds or accounts established pursuant to the Indenture or the Lease Agreement or any funds or accounts on deposit, or otherwise to the credit of, such funds or accounts shall become subject to any stay, writ, judgment, warrant of attachment, execution or similar process by any of the creditors of the City or the Authority and such stay, writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or stayed within thirty (30) days after its issue or levy; or (n) An event shall have occurred that in the opinion of the Bank has a material adverse effect on the financial condition, operations or prospects of the City or its ability to perform its obligations under the Reimbursement Agreement or any Related Document.
Remedies. If an Event of Default under the Reimbursement Agreement shall have occurred and be continuing, the Bank may (i) give notice to the Trustee under the Indenture of the Bank’s election to cause a mandatory tender of the 2008 Bonds because of the occurrence and continuance of an Event of Default under the Reimbursement Agreement, (ii) declare all unpaid amounts drawn under the Letter of Credit and the corresponding Bank Bonds, together with all interest accrued and unpaid thereon and all other amounts payable to the Bank under the Reimbursement Agreement to be immediately due and payable, without presentment, demand, protest or any notice of any kind, but subject to certain limitations on repayment set forth in the Reimbursement Agreement or (iii) exercise any and all rights and remedies available to the Bank under the Reimbursement Agreement or the Indenture, at law or in equity; provided, that the Bank may not cause the acceleration of Base Rental Payments under the Lease Agreement. In the event of the occurrence of an Event of Default described in paragraphs (c) or (d) above, all unpaid amounts drawn under the Letter of Credit and the corresponding Bank Bonds, together with all interest accrued thereon and all other amounts payable to the Bank under the Reimbursement Agreement shall be immediately due and payable, without notice to the City or the Authority and without presentment, demand, protest or further notice of any kind, but subject to certain limitations on repayment set forth in the Reimbursement Agreement.
INFORMATION CONCERNING THE BANK
Except for the contents under this subheading, BMO Bank N.A. did not participate in the preparation of, or in any way verify the information in, any other part of this Supplement and assumes no responsibility for the nature, contents, accuracy or completeness of the information set forth in this Supplement.
#17..
- 1076 -
6 302683358.3
BMO Bank N.A. (“BBNA”), with executive offices in Chicago, Illinois, is a wholly-owned subsidiary of BMO Financial Corp., a Delaware corporation (“BFC”). BFC is based in Chicago and whollyowned by Bank of Montreal (“BMO”) (NYSE, TSX: BMO). BFC operates primarily through its subsidiary BBNA, which provides banking, financing, investing and cash management services in the United States.
BMO brands the organization’s member companies as BMO Financial Group (“BMO FG”). BMO FG is a highly diversified financial services provider based in North America, providing a broad range of products and services directly and through Canadian and non-Canadian subsidiaries, offices, and branches.
Additional information about BBNA and BMO is available on SEDAR (http://www.sedar.com), EDGAR (http://www.sec.gov) and on BMO’s website (https://www.bmo.com/main/aboutbmo/banking/investor-relations), or will be provided without charge upon written request directed to: Bank of Montreal, Corporate Secretary’s Department, 100 King Street West, 1 First Canadian Place, 9th Floor, Toronto, Ontario M5X 1A1. The financial information referenced in this paragraph is not incorporated by reference into this Supplement.
The Letter of Credit is an obligation solely of BBNA and is not an obligation of, or otherwise guaranteed by, BFC, BMO or any of their respective affiliates (other than BBNA). Neither BFC, BMO or any of their respective affiliates (other than BBNA) is required to make payments under the Letter of Credit.
None of BBNA, BFC, BMO or any of their respective affiliates makes any representation as to, or is responsible for the suitability of the 2008 Bonds for any investor, the feasibility or performance of any project or compliance with any securities or tax laws or regulations. The 2008 Bonds are not direct obligations of, or guaranteed by, the BBNA, BFC, BMO or any of their respective affiliates.
The above information has been supplied by BBNA. The delivery of the information in this Supplement shall not create any implication that there has been no change in the affairs of BMO or BBNA since the date such information was provided by BBNA, or that the information contained or referred to in this Supplement is correct as of any time subsequent to the date it was provided by BBNA.
RATINGS
Fitch and S&P have assigned the 2008 Bonds the ratings of [“AA- (negative outlook)/F1+” and “A+ (stable)/A-1”], respectively, based on the Bank’s Letter of Credit supporting the 2008 Bonds.
Generally, rating agencies base their ratings on information and material furnished directly to them and on investigations, studies and assumptions made by them. The ratings reflect only the views of such organizations and an explanation of the significance of such ratings may be obtained from Fitch Ratings, 33 Whitehall Street, New York, New York 10004 and Standard & Poor’s Ratings Services, 55 Water Street, New York, New York 10041. Neither the Authority nor the City makes any representation as to the appropriateness of the ratings. There is no assurance that the ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by such rating agencies, if, in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2008 Bonds.
MISCELLANEOUS
This Supplement is not to be construed as a contract or agreement between the Authority or the City and the purchasers or holders of any of the 2008 Bonds. Any statements made in this Supplement involving matters of opinion, whether or not expressly so stated, are intended merely as an opinion and not as representations of fact. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Supplement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the City or the Bank since the date hereof.
#17..
- 1077 -
302683358.3
This Supplement has been duly approved, executed and delivered by the City and the Authority.
CITY OF MODESTO, CALIFORNIA
By: /s/ DeAnna Christensen
Director of Finance
MODESTO PUBLIC FINANCING AUTHORITY
By: /s/ DeAnna Christensen
Auditor and Treasurer
#17..
- 1078 -
A-1
302683358.3
APPENDIX A
COPY OF OFFICIAL STATEMENT, DATED AUGUST 26, 2008,
AS SUPPLEMENTED AS OF FEBRUARY 25, 2014, JUNE 22, 2016, JUNE 4, 2019 AND MAY 11, 2023
#17..
- 1079 -
4920-8399-6566.5
NP DRAFT 4/16
AMENDMENT NO. 2 TO FEE LETTER AGREEMENT
May [__], 2026
City of Modesto
1010 Tenth Street, Suite 5200
Modesto, California 95354
Modesto Public Financing Authority
c/o City of Modesto
1010 Tenth Street, Suite 5200
Modesto, California 95354
Re: Modesto Public Financing Authority Lease Revenue Refunding Bonds, Series 2008 Ladies and Gentlemen:
This Amendment No. 2 to Fee Letter Agreement, dated May [__], 2026 (this “Fee Letter Agreement Amendment No. 2”), by and among BMO Bank N.A. (formerly known as BMO Harris Bank N.A., the “Bank”), the Modesto Public Financing Authority (the “Authority”) and the City of Modesto (the “City”), amends that certain Fee Letter Agreement, dated June 13, 2019, by and among Bank of the West (predecessor to the Bank), the Authority and the City (the “Original Fee Letter Agreement,” and, as amended by the Amendment No. 1 to Fee Letter Agreement, dated May 12, 2023, by and among BMO Harris Bank N.A. (which the Bank was formerly known as), the City and the Authority (“Amendment No. 1 to Fee Letter Agreement”) shall hereinafter be referred to as the “Prior Fee Letter Agreement”). This Fee Letter Agreement Amendment No. 2, together with the Prior Fee Letter Agreement, is hereby referred to as the “Fee Letter Agreement, as it may be further amended and supplemented from time to time.
Reference is hereby made to that certain Reimbursement Agreement, dated as of June 1, 2019 (the “Original Reimbursement Agreement”), by and among the City, the Authority and Bank of the West, as amended by that certain Amendment No. 1 to Reimbursement Agreement, dated May 12, 2023 (the “Reimbursement Agreement Amendment No. 1”), by and among the City, the Authority and BMO Harris Bank N.A., and by that certain Amendment No. 2 to Reimbursement Agreement, dated May [__], 2026 (the “Reimbursement Agreement Amendment No. 2”, and the Original Reimbursement Agreement, as amended by the Reimbursement Agreement Amendment No. 1 and the Reimbursement Agreement Amendment No. 2 and as the same may be further amended or supplemented from time to time, the “Agreement”), by and among the City, the Authority and the Bank, pursuant to which Bank of the West issued its Irrevocable Transferable Letter of Credit No. MB60517199, as amended from time to time, including as amended by that certain Amendment No. 1 to Irrevocable Transferable Letter of Credit No. MB60517199 dated May 12, 2023 (“Letter of Credit Amendment No. 1”) issued by the Bank, and that certain Amendment No. 2 to Irrevocable Transferable Letter of Credit No.
HACH699560OS dated May [__], 2026 (the “Letter of Credit Amendment No. 2”) issued by the Bank, supporting the above-referenced Bonds (as so amended and as it may be further amended #17..
- 1080 -
4920-8399-6566.5
- 2 -
and supplemented from time to time, the “Letter of Credit”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.
Section 1. Authority and Definitions.
(a) This Fee Letter Agreement Amendment No. 2 is entered into pursuant to Section 2.1 of the Prior Fee Letter Agreement.
(b) This Fee Letter Agreement Amendment No. 2 amends the Prior Fee Letter Agreement.
(c) Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.
(d) This Fee Letter Agreement Amendment No. 2 shall become effective upon the execution and delivery hereof by the Authority, the City and the Bank on May [__], 2026. (e) The provisions of this Fee Letter Agreement Amendment No. 2 shall supersede and prevail over any conflicting provisions of the Prior Fee Letter Agreement. If there is any conflict between the terms, conditions and provisions of this Fee Letter Agreement Amendment No. 2 and those of any of the Related Documents, the terms, conditions and provisions of this Fee Letter Agreement Amendment No. 2, as applicable, shall prevail. Save and except as expressly amended hereby, all of the terms and provisions of the Prior Fee Letter Agreement shall continue in full force and effect and are applicable to the provisions of this Fee Letter Agreement Amendment No. 2 and the obligations of the parties hereunder. Reference to this specific Fee Letter Agreement Amendment No. 2 need not be made in any note, document, agreement, letter, certificate, the Agreement or any communication issued or made subsequent to, or with respect to, the Agreement, it being hereby agreed that any reference to the Agreement shall be sufficient to refer to the Prior Fee Letter Agreement as hereby amended. The parties hereto expressly agree that this Fee Letter Agreement Amendment No. 2 shall constitute a modification of the Prior Fee Letter Agreement and does not constitute a novation or substitution with respect to the Prior Fee Letter Agreement.
Section 2. Amendment of the Prior Fee Letter Agreement. (a) All references to “BMO Harris Bank, N.A” or “Bank of the West,” as applicable, in the Prior Fee Letter Agreement shall refer to “BMO Bank, N.A.” instead. (b) Section 1.1 of the Prior Fee Letter Agreement is hereby deleted in its entirety and the following substituted therefor:
Section 1.1. Letter of Credit Fee. For the period from May 12, 2023 through June [8], 2026, the Letter of Credit Fee (as defined below) shall be as set forth in the Amendment No. 1 to Fee Letter Agreement (which provisions, for purposes of determining the Letter of Credit Fee in effect for the period from May 12, 2023 through June [8], 2026, was incorporated by reference into the Agreement)[ and, as of the date of this Fee Letter Agreement Amendment No. 2, the Bank, the City and the Authority hereby agree and acknowledge is 0.34% per annum]. For the period from and after June [9], 2026, the Authority and the City (by payment of Additional Payments under the Lease Agreement) #17..
- 1081 -
4920-8399-6566.5
- 3 -
hereby agree to pay or cause to be paid to the Bank a nonrefundable letter of credit fee (the “Letter of Credit Fee”), payable semiannually in arrears from and after June [9], 2026 as further described in Section 1.2 hereof), equal to (i) the Letter of Credit Fee Rate multiplied by (ii) the Stated Amount of the Letter of Credit, for each day during such semiannual period commencing on the first day of such semiannual period (or, in the case of the first semiannual period of April 1, 2026 through September, 30, 2026, from and after June [9], 2026) and ending on the last calendar day of such semiannual period. As used above, “Letter of Credit Fee Rate” shall mean 0.34%, as subject to increase pursuant to Amendment No. 1 to Fee Letter Agreement through June [8], 2026, and, from and after June [9], 2026, shall mean 0.32% per annum, increased one time per level by the percentage points indicated below for each level below the A2/A/A level through or to which the current rating assigned to any long term, unenhanced general fund obligation of the City by Moody’s Investors Service, Inc., S&P Global Ratings or Fitch Ratings, Inc. falls:
Rating
(Moody’s/S&P/Fitch)
Percentage Point
Increase
A2/A/A or higher 0.00%
A3/A-/A- 0.10%
Baa1/BBB+/BBB+ 0.10%
In the event that (x) the ratings assigned to any long term, unenhanced general fund obligation of the City shall be withdrawn or suspended or otherwise unavailable for creditrelated reasons or reduced below Baa1 by Moody’s Investors Service, Inc., BBB+ by S&P Global Ratings or BBB+ by Fitch Ratings, Inc. or (y) upon the occurrence of an Event of Default, the then current Letter of Credit Fee Rate based on the table above will be increased by an additional 1.50% per annum. In the event of split ratings, the Letter of Credit Rate will be based on the level that includes the lowest such rating. All such fee increases shall be cumulative.
(c) Section 1.2 of the Original Fee Letter Agreement is hereby deleted in its entirety and the following substituted therefor:
Section 1.2. Payment Dates. The Letter of Credit Fee shall be paid semiannually in arrears for the preceding semiannual period on the first Business Day of each April and October, with the next payment to occur on [October 1, 2026] (which such payment shall include the Letter of Credit Fee as calculated pursuant to Section 1.1 hereof) for the calendar quarter commencing on April 1, 2026 and ending on September 30, 2026 and on the Expiration Date.
(d) The last sentence of Section 1.3 of the Prior Fee Letter Agreement is hereby deleted in its entirety.
(e) Section 1.6 of the Prior Fee Letter is hereby deleted by replacing the bank account information set forth therein and replacing it with the following:
#17..
- 1082 -
4920-8399-6566.5
- 4 -
[“BMO Bank, N.A.
ABA#: _____
A/C#: _____
Attention: _____
Ref: LC No. HACH699560OS
Obligor No. _________”]
(f) Article II of the Prior Fee Letter Agreement is hereby amended by deleting the notice information therein and replacing it with the following:
If with respect to draws under the Letter of Credit, to:
BMO Bank, N.A.
Global Trade Operations
13300 Crossroads Parkway North | SC-XRD-2W-G
City of Industry, CA 91746-3417
Tel: 1-(888) 600-8723
Fax: 1-(323) 727-6487
Group email: [email protected]
If with respect to the Agreement, to:
BMO Bank, N.A.
180 Montgomery Street
San Francisco, California 94104
Attention: Edward C. Neu, Managing Director
Telephone: (415) 765-4938
Email: [email protected]
and
BMO Bank, N.A.
320 S. Canal Street, 16th Floor
Chicago, Illinois 60606
Attention: Millicent Jackson, Vice President
Telephone: (312) 461-5610
Email: [email protected]
Section 3. Miscellaneous.
(a) Governing Law. This Fee Letter Agreement Amendment No. 2 shall be governed by, and construed in accordance with, the laws of the State of California. (b) Counterparts. This Fee Letter Agreement Amendment No. 2 may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. This Fee Letter Agreement Amendment No. 2 may be #17..
- 1083 -
4920-8399-6566.5
- 5 -
delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. (c) Severability. Any provision of this Fee Letter Agreement Amendment No. 2 which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, by ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provisions in any other jurisdiction.
(d) One Agreement. Taken together with the Prior Fee Letter Agreement and the other instruments and documents delivered in compliance herewith, this Fee Letter Agreement Amendment No. 2 and any related security or other agreements required by this Fee Letter Agreement Amendment No. 2, collectively: (i) represent the sum of the understandings and agreements among the Authority, the Bank and the City concerning this credit; (ii) replace any prior oral or written agreements between or among the Bank and the Authority and/or the City concerning this credit; and (iii) are intended by the Bank, the Authority and the City as the final, complete and exclusive statement of the terms agreed to by them. In the event of any conflict between this Fee Letter Agreement Amendment No. 2 and any other agreements required by this Fee Letter Agreement Amendment No. 2, this Fee Letter Agreement Amendment No. 2 will prevail.
[The remainder of this page intentionally left blank]
#17..
- 1084 -
4920-8399-6566.5
[Signature Page to Amendment No. 2 to Fee Letter Agreement] S-1
If the foregoing accurately reflects our agreement, please indicate the same by signing in the space provided below.
Very truly yours,
BMO BANK N.A.
By:
Name: Edward C. Neu
Title: Managing Director
[Signatures continue on the next page]
#17..
- 1085 -
4920-8399-6566.5
[Signature Page to Amendment No. 2 to Fee Letter Agreement] S-2
Accepted and Agreed to:
CITY OF MODESTO
By:
Typed Name: DeAnna Christensen
Title: Finance Director/Treasurer
Attest:
By:
Typed Name: Diane Navares-Perez
Title: City Clerk
Approved as to Form:
By:
Typed Name:
Title:
MODESTO PUBLIC FINANCING
AUTHORITY
By:
Typed Name: DeAnna Christensen
Title: Auditor and Treasurer
#17..
- 1086 -
4925-1705-8454.5
NP DRAFT 4/16
AMENDMENT NO. 2 TO
REIMBURSEMENT AGREEMENT
among
BMO BANK N.A.
and
CITY OF MODESTO
and
MODESTO PUBLIC FINANCING AUTHORITY
Dated May [__], 2026
Relating to the
MODESTO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS
SERIES 2008
Amending that certain Reimbursement Agreement, dated as of June 1, 2019, by and among Bank of the West, the City of Modesto and the Modesto Public Financing Authority, as amended by that certain Amendment No. 1 to Reimbursement Agreement, by and among BMO Harris Bank N.A. (as successor to Bank of the West), the City of Modesto and the Modesto Public Financing Authority
#17..
- 1087 -
4925-1705-8454.5
AMENDMENT NO. 2 TO
REIMBURSEMENT AGREEMENT
This AMENDMENT NO. 2 TO REIMBURSEMENT AGREEMENT (this “Amendment No. 2”), dated May [__], 2026, by and among BMO BANK N.A., a national banking association (formerly known as BMO Harris Bank N.A., the “Bank”), the MODESTO PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”) and the CITY OF MODESTO, a charter city and municipal corporation duly organized and existing under laws of the State of California (the “City”).
WITNESSETH:
A. Bank of the West, the Authority and the City entered into that certain Reimbursement Agreement, dated as of June 1, 2019 (the “Original Reimbursement Agreement”), by and among the Bank, the Authority and the City.
B. Effective February 1, 2023, the Letter of Credit became an obligation of the Bank as successor to Bank of the West, and the Original Reimbursement Agreement was amended by that certain Amendment No. 1 to Reimbursement Agreement, dated May 12, 2023 (the “First Amendment,” and, with the Original Reimbursement Agreement, is hereby referred to as the “Revised Agreement”), by and among the Bank, the Authority and the City, which extended the Stated Expiration of the Letter of Credit to June 8, 2026.
C. The City has applied to the Bank, and the Bank has agreed on the terms and conditions set forth herein, for the extension by the Bank of the Stated Expiration Date of the Letter of Credit to [June 8, 2029] and an amendment of certain provisions of the Revised Agreement and certain provisions of the Fee Letter Agreement, dated as of June 13, 2019 as amended by the Amendment No. 1 to Fee Letter Agreement, dated May 2023 among the Bank, the City and the Authority (collectively, the “Prior Fee Letter”).
D. As of May [__], 2026, the Stated Amount of the Letter of Credit is $[_______], consisting of a Principal Portion of $[35,995,000.00] and an Interest Portion of $[366,138.08]. [TBD]
NOW, THEREFORE, in consideration of the foregoing and the undertakings herein set forth and intending to be legally bound, the Authority, the City and the Bank hereby agree as follows:
Section 1. Authority and Definitions.
(a) This Amendment No. 2 is entered into pursuant to Section 7.1 of the Revised Agreement.
(b) This Amendment No. 2 amends the Revised Agreement.
(c) Capitalized terms used herein without definition shall have the meanings set forth in the Revised Agreement.
#17..
- 1088 -
4925-1705-8454.5
2 (d) Subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, this Amendment No. 2 shall become effective, a letter of credit amendment substantially in the form of Exhibit A attached hereto (the “Letter of Credit Amendment No. 2”) shall be delivered to the Trustee by the Bank, and the Amendment No. 2 to Fee Letter Agreement, dated May [__], 2026, by and among the City, the Authority and the Bank (the “Fee Letter Agreement Amendment No. 2”), shall be executed and delivered by the Bank, upon the execution and delivery hereof by the Authority, the City and the Bank on May [__], 2026 (the “Extension Closing Date”). (e) The provisions of this Amendment No. 2 shall supersede and prevail over any conflicting provisions of the Revised Agreement. If there is any conflict between the terms, conditions and provisions of this Amendment No. 2 and those of any of the Related Documents, the terms, conditions and provisions of this Amendment No. 2, as applicable, shall prevail. Save and except as expressly amended hereby, all of the terms and provisions of the Revised Agreement continue in full force and effect and are applicable to the provisions of this Amendment No. 2 and the obligations of the parties hereunder. Reference to this specific Amendment No. 2 need not be made in any note, document, agreement, letter, certificate, the Revised Agreement or any communication issued or made subsequent to, or with respect to, the Revised Agreement, it being hereby agreed that any reference to the Reimbursement Agreement shall be sufficient to refer to the Revised Agreement as hereby amended. The parties hereto expressly agree that this Amendment No. 2 shall constitute a modification of the Revised Agreement and does not constitute a novation or substitution with respect to the Revised Agreement.
Section 2. Amendment of the Revised Agreement.
(a) All references to the Bank in the Revised Agreement shall refer to BMO Bank N.A.
(b) The definitions of “Agreement,” “Bank” and “Fee Letter Agreement” in Section 1.1 of the Revised Agreement are hereby deleted in their entirety and the following substituted therefor:
“Agreement” shall mean this Reimbursement Agreement, dated as of June 1, 2019, by and among the Bank (as successor to Bank of the West), the Authority and the City, as amended by the Amendment No. 1 to Reimbursement Agreement, dated May 12, 2023, by and among the Bank, the Authority and the City, and the Amendment No. 2 to Reimbursement Agreement, dated May [__], 2026, by and among the Bank, the Authority and the City, and as the same may from time to time be further amended, supplemented or otherwise modified in accordance with its terms.
“Bank” means BMO Bank N.A. and its successors and assigns. “Fee Letter Agreement” shall mean the Fee Letter Agreement dated June 13, 2019 by and among the City, the Authority and the Bank (as successor to Bank of the West), as amended by the Amendment No. 1 to Fee Letter Agreement, dated May 12, 2023, by and among the City, the Authority and the Bank, and the Amendment No. 2 to Fee Letter Agreement, dated May [__], 2026, by and among #17..
- 1089 -
4925-1705-8454.5
3 the City, the Authority and the Bank, and as the same may be further amended or supplemented from time to time.
(c) The Revised Agreement is hereby amended by adding the attached “Schedule I – Schedule of Mandatory Payments” thereto after Exhibit A therein and by adding a reference to Schedule I to the Table of Contents thereof.
Section 3. Conditions Precedent to Execution and Delivery and Effectiveness of this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 and Issuance of the Letter of Credit Amendment No. 2. The obligation of the Bank to execute and deliver this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 and to issue the Letter of Credit Amendment No. 2 shall be subject to the fulfillment of the following conditions precedent on or before the Extension Closing Date, in a manner satisfactory to the Bank and its counsel:
(a) the Bank shall have received opinions of the City Attorney and counsel to the Successor Agency, each in form and substance satisfactory to the Bank and its counsel dated the Extension Closing Date;
(b) the Bank shall have received an opinion of the counsel to the Authority, in form and substance satisfactory to the Bank and its counsel dated the Extension Closing Date; (c) the Bank shall have received on the Extension Closing Date executed originals of this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2, and any other documents which the Bank may reasonably request evidencing that all necessary action (including, without limitation, adoption of resolutions) required to be taken by the Authority and the City in connection with the authorization, execution, issuance, delivery and performance of such documents and any other document required to be delivered by the City pursuant to or in connection with this Amendment No. 2 or the Fee Letter Agreement Amendment No. 2 or the transactions contemplated hereby or thereby, has been taken; (d) the Bank shall have received a certificate signed by an Authorized Representative of the City dated the Extension Closing Date stating that on such date:
(i) the representations and warranties set forth in this Amendment No. 2 and in any other certificate, letter, writing or instrument delivered by the City to the Bank pursuant hereto or in connection herewith, shall be true and correct as of the Extension Closing Date;
(ii) no material adverse change shall have occurred in the condition (financial or otherwise) of the City prior to the Extension Closing Date; (iii) on the Extension Closing Date no Event of Default or no event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default, shall have occurred and be continuing; (iv) there is no lawsuit, tax claim or other dispute pending or threatened against the City which, if lost, would impair the City’s financial condition or ability #17..
- 1090 -
4925-1705-8454.5
4 to repay the unreimbursed Drawings, except as have been disclosed in writing to the Bank;
(v) the City is in compliance with the terms and conditions of Reimbursement Agreement and has performed or complied with all of its Obligations, agreements and covenants to be performed or complied with pursuant to the Reimbursement Agreement on or prior to the Extension Closing Date; (vi) all information, documents, statements and certificates provided to the Bank by or on behalf of the City in connection with the Letter of Credit Amendment No. 2 are true and correct on and as of the date hereof and were provided in expectation of the Bank’s reliance thereon in issuing the Letter of Credit Amendment No. 2; and
(vii) the City has delivered to the Bank true, correct and complete copies of the Related Documents and such documents were duly issued, adopted or executed and delivered, have not been modified, amended or rescinded and are in full force and effect on and as of the Extension Closing Date and the Title Insurance Policy has not been modified, amended or rescinded and is in full force and effect on and as of the Extension Closing Date;
(e) the Bank shall have received copies of resolutions of the City Council of the City, certified as of the Extension Closing Date by the City Clerk, authorizing, among other things, the execution, delivery and performance by the City of this Amendment No. 2, the Fee Letter Agreement Amendment No. 2 and any other documents to be delivered by it hereunder; (f) the Bank shall have received a certificate of an Authorized Representative of the City dated the Extension Closing Date certifying as to the authority, incumbency and specimen signatures of the Authorized Representative of the City authorized to sign this Amendment No. 2, the Fee Letter Agreement Amendment No. 2 and any other documents to be delivered by it hereunder and who will be authorized to represent the City in connection with the Letter of Credit, the Reimbursement Agreement and the Fee Letter Agreement, upon which the Bank may rely until it receives a new such certificate; (g) the Bank shall have received a certificate signed by an Authorized Representative of the Authority dated the Extension Closing Date stating that on such date:
(i) the representations and warranties set forth in this Amendment No. 2 and in any other certificate, letter, writing or instrument delivered by the Authority to the Bank pursuant hereto or in connection herewith, shall be true and correct as of the Extension Closing Date;
(ii) no material adverse change shall have occurred in the condition (financial or otherwise) of the Authority prior to the Extension Closing Date; (iii) on the Extension Closing Date no Event of Default or no event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default, shall have occurred and be continuing; #17..
- 1091 -
4925-1705-8454.5
5 (iv) there is no lawsuit, tax claim or other dispute pending or threatened against the Authority which, if lost, would impair the Authority’s financial condition or ability to repay the unreimbursed Drawings, except as have been disclosed in writing to the Bank;
(v) the Authority is in compliance with the terms and conditions of the Reimbursement Agreement and has performed or complied with all of its Obligations, agreements and covenants to be performed or complied with pursuant to the Reimbursement Agreement on or prior to the Extension Closing Date; (vi) all information, documents, statements and certificates provided to the Bank by or on behalf of the Authority in connection with the Letter of Credit Amendment No. 2 are true and correct on and as of the date hereof and were provided in expectation of the Bank’s reliance thereon in issuing the Letter of Credit Amendment No. 2; and
(vii) the Authority has delivered to the Bank true, correct and complete copies of the Related Documents and such documents were duly issued, adopted or executed and delivered, have not been modified, amended or rescinded and are in full force and effect on and as of the Extension Closing Date; (h) the Bank shall have received copies of resolutions of the governing board of the Authority, certified as of the Extension Closing Date by the secretary of such governing board, authorizing, among other things, execution, delivery and performance by the Authority of this Amendment No. 2, the Fee Letter Agreement Amendment No. 2 and any documents to be delivered by it hereunder;
(i) the Bank shall have received a certificate of an Authorized Representative of the Authority dated the Extension Closing Date certifying as to the authority, incumbency and specimen signatures of the Authorized Representative of the Authority authorized to sign this Amendment No. 2, the Fee Letter Agreement Amendment No. 2 and any other documents to be delivered by it hereunder and who will be authorized to represent the Authority in connection with the Letter of Credit, the Reimbursement Agreement and the Fee Letter Agreement, upon which the Bank may rely until it receives a new such certificate; (j) the representations and warranties set forth in Section 4 hereof shall be true and correct on and as of the Extension Closing Date and no Event of Default or event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default shall have occurred and be continuing;
(k) payment to the Bank of (or the Bank shall be reasonably satisfied that payment will be made promptly after demand therefor after the Extension Closing Date of) all fees and expenses payable by the City pursuant to Section 5 hereof; and (l) all other legal matters pertaining to the execution and delivery of this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 and the issuance of the Letter of Credit Amendment No. 2 shall be reasonably satisfactory to the Bank and its counsel. #17..
- 1092 -
4925-1705-8454.5
6 Section 4. Representations and Warranties.
(a) The City hereby represents and warrants as of the Extension Closing Date that: (i) the representations and warranties of the City set forth in Article 4.1 of the Original Reimbursement Agreement and in any and all documents delivered to the Bank in connection therewith are true and correct on and as of the Extension Closing Date, as if made on and as of such date; (ii) no Event of Default or event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default has occurred and is continuing; (iii) no default has occurred and is continuing under any of the Related Documents; (iv) the City is in compliance with the terms and conditions of the Original Reimbursement Agreement and has performed or complied with all of its obligations, agreements and covenants to be performed or complied with pursuant to the Reimbursement Agreement on or prior to the Extension Closing Date; (v) no material adverse change in the financial condition, operations or prospects of the City or laws, rules or regulations (or their interpretation or administration) shall have occurred as of the Extension Closing Date that, in any case, may adversely affect the consummation of the transaction, as determined in the sole discretion of the Bank; (vi) this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 have each been duly authorized, executed and delivered by the City; and (vii) all information, documents, statements and certificates provided to the Bank by or on behalf of the City in connection with the transactions contemplated by this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 are true and correct as of the date thereof and were provided in expectation of the Bank’s reliance thereon in executing this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 and issuing the Letter of Credit Amendment No. 2.
(b) The Authority hereby represents and warrants as of the Extension Closing Date that: (i) the representations and warranties of the Authority set forth in Article 4.2 of the Reimbursement Agreement and in any and all documents delivered to the Bank in connection therewith are true and correct on and as of the Extension Closing Date, as if made on and as of such date; (ii) no Default or event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default has occurred and is continuing; (iii) no default has occurred and is continuing under any of the Related Documents; (iv) the Authority is in compliance with the terms and conditions of the Reimbursement Agreement and has performed or complied with all of its obligations, agreements and covenants to be performed or complied with pursuant to the Reimbursement Agreement on or prior to the Extension Closing Date; (v) this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 have each been duly authorized, executed and delivered by the Authority; and (vi) all information, documents, statements and certificates provided to the Bank by or on behalf of the Authority in connection with the transactions contemplated by this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 are true and correct as of the date thereof and were provided in expectation of the Bank’s reliance thereon in executing this Amendment No. 2 and the Fee Letter Agreement Amendment No. 2 and issuing the Letter of Credit Amendment No. 2.
Section 5. Costs and Expenses. The City shall pay (by payment of Additional Payments under the Lease Agreement) to the Bank any and all reasonable fees, charges and expenses, payable or incurred by the Bank in connection with the execution and delivery of this Amendment No. 2, the Fee Letter Agreement Amendment No. 2 and the Letter of Credit Amendment No. 2, including without limitation, the fees and expenses of counsel to the Bank, #17..
- 1093 -
4925-1705-8454.5
7 Nixon Peabody LLP no later than 30 days after the Extension Closing Date pursuant to an invoice of such counsel. The City hereby agrees that such fees, charges and expenses are included as obligations under the Original Reimbursement Agreement.
Section 6. Miscellaneous.
(a) No Waiver. The Authority and the City each acknowledge and agree that, if and to the extent that the Bank has not heretofore required strict compliance with the performance by the Authority and the City of the covenants, agreements and obligations of the Authority and the City under the Reimbursement Agreement or the Related Documents, such action or inaction shall not constitute a waiver of, or otherwise affect in any manner, the Bank’s rights and remedies under the Reimbursement Agreement or the Related Documents, as amended hereby, including the right to require performance of such covenants, agreements and obligations strictly in accordance with the terms and provisions thereof.
(b) Counterparts. This Amendment No. 2 may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. This Amendment No. 2 may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. (c) Severability. Any provision of this Amendment No. 2 which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, by ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provisions in any other jurisdiction.
(d) One Agreement. Taken together with the Revised Agreement and the other instruments and documents delivered in compliance herewith, this Amendment No. 2 and any related security or other agreements required by this Amendment No. 2, collectively: (i) represent the sum of the understandings and agreements among the Authority, the Bank and the City concerning this credit; (ii) replace any prior oral or written agreements between or among the Bank and the Authority and/or the City concerning this credit; and (iii) are intended by the Bank, the Authority and the City as the final, complete and exclusive statement of the terms agreed to by them. In the event of any conflict between this Amendment No. 2 and any other agreements required by this Amendment No. 2, this Amendment No. 2 will prevail. (e) Governing Law. This Amendment No. 2 shall be governed by, and construed in accordance with, the laws of the State of California. (f) PATRIOT ACT NOTICE. Federal law requires the Bank to provide the following notice. This notice is not part of the foregoing agreement or instrument and may not be altered. Please read the notice carefully.
USA PATRIOT ACT NOTICE. Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or #17..
- 1094 -
4925-1705-8454.5
8 obtains a loan. The Bank will ask for the Authority’s and the City’s legal name, address, tax ID number or social security number and other identifying information. The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of the Authority, the City, guarantors or other related persons.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
#17..
- 1095 -
4925-1705-8454.5
[Signature Page to Amendment No. 2 to Reimbursement Agreement] S-1
This Amendment No. 2 to Reimbursement Agreement is executed as of the date stated on the first page.
BMO BANK N.A.
By:
Name: Edward C. Neu
Title: Managing Director
[Signatures continue on the next page]
#17..
- 1096 -
4925-1705-8454.5
[Signature Page to Amendment No. 2 to Reimbursement Agreement] S-2
CITY OF MODESTO
By:
Typed Name: DeAnna Christensen
Title: Finance Director/Treasurer
ATTEST:
By:
Typed Name: Diane Navares-Perez
Title: City Clerk
APPROVED AS TO FORM:
By:
Typed Name:
Title:
MODESTO PUBLIC FINANCING
AUTHORITY
By:
Typed Name: DeAnna Christensen
Title: Auditor and Treasurer
#17..
- 1097 -
4925-1705-8454.5
Exhibit A-1
Exhibit A
Form of Letter of Credit Amendment No. 2
Irrevocable Transferable Letter of Credit No. HACH699560OS (which was previously referred to as MB60517199)
Amendment No. 2
[Letterhead of BMO Bank N.A.]
May [__], 2026
The Bank of New York Mellon Trust Company, N.A.
400 South Hope Street, Suite 500
Los Angeles, California 90071
Attention: _____________________
Ladies and Gentlemen:
Pursuant to Section 2.1 of the Reimbursement Agreement, dated as of June 1, 2019 (the “Original Reimbursement Agreement”), by and among the City of Modesto (the “City”), the Modesto Public Financing Authority (the “Authority”) and Bank of the West (as predecessor to the Bank (defined below), as amended by the Amendment No. 1 to Reimbursement Agreement, dated May 12, 2023, and the Amendment No. 2 to Reimbursement Agreement, dated May [__], 2026 (the “Reimbursement Agreement Amendment No. 2”), each by and among the City, the Authority and BMO Bank, N.A. (formerly known as BMO Harris Bank N.A., the “Bank”), the Bank has approved an extension of Irrevocable Transferable Letter of Credit No. _______ (the “Letter of Credit”), dated June 13, 2019 and from June 8, 2026 to June [8], 2029.
The Letter of Credit is hereby amended as follows:
1. All references in the Letter of Credit to “MB60517199” shall be replaced by “HACH699560OS.”
2. The Stated Expiration Date of the Letter of Credit shall be extended to [June 8, 2029].
3. All references to the Bank in the Letter of Credit shall be amended to refer to BMO Bank N.A. instead.
4. All references to addresses of the Bank in the Letter of Credit with respect to draws under the Letter of Credit shall be replaced with the following:
#17..
- 1098 -
4925-1705-8454.5
Exhibit A-2
BMO Bank N.A.
Global Trade Operations
13300 Crossroads Parkway North | SC-XRD-2W-G
City of Industry, CA 91746-3417
Tel: 1-(888) 600-8723
Fax: 1-(323) 727-6487
Group email: [email protected]
You are hereby authorized to attach this Amendment No. 2 to the Letter of Credit and to treat this Amendment No. 2 as an amendment to the Letter of Credit.
All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Original Reimbursement Agreement, as amended by the Reimbursement Agreement Amendment No. 2 and as it may be further amended or supplemented from time to time (the “Reimbursement Agreement”) or the Letter of Credit.
Very truly yours,
BMO BANK N.A.
By:
Name:
Title:
By:
Name:
Title:
#17..
- 1099 -
4925-1705-8454.5
Exhibit A-3
SCHEDULE I
SCHEDULE OF MANDATORY PREPAYMENTS
The Bank, the City and the Authority hereby acknowledge and agree that the inclusion of this Schedule I is to provide a schedule of the expected mandatory repayment of the Bonds and the corresponding reduction of the Letter of Credit Amount. #17..
- 1100 -
4925-1705-8454.5
Exhibit A-4
Manual Calculation based on Amortization Schedule (Modesto Public Financing Authority Lease Revenue Refunding Bonds, Series 2008), CUSIP 607796BU2
Principal
Balance (prior
to sinking fund
pmt)
Sinking Fund
Payment
9/1
New Principal
Balance (after
sinking fund pmt)
Located
Notice of
Redemption Days Rate Basis Interest
Letter of
Credit
Amount
$ 50,915,000.00 34 12.000000% 365 569,132.05 51,484,132.05 2019 50,915,000.00 $2,000,000.00 $ 48,915,000.00 34 12.000000% 365 546,775.89 49,461,775.89 2020 48,915,000.00 $2,170,000.00 $ 46,745,000.00 34 12.000000% 365 522,519.45 47,267,519.45 2021 46,745,000.00 $2,390,000.00 $ 44,355,000.00 34 12.000000% 365 495,803.84 44,850,803.84 2022 44,355,000.00 $2,585,000.00 $ 41,770,000.00 Yes 34 12.000000% 365 466,908.49 42,236,908.49 2023 41,770,000.00 $2,785,000.00 $ 38,985,000.00 Yes 34 12.000000% 365 435,777.53 39,420,777.53 2024 38,985,000.00 $2,990,000.00 $ 35,995,000.00 Yes 34 12.000000% 365 402,355.07 36,397,355.07 2025 35,995,000.00 $3,240,000.00 $ 32,755,000.00 Yes 34 12.000000% 365 366,138.08 33,121,138.08 2026 32,755,000.00 $3,470,000.00 $ 29,285,000.00 34 12.000000% 365 327,350.14 29,612,350.14 2027 29,285,000.00 $3,730,000.00 $ 25,555,000.00 34 12.000000% 365 285,655.89 25,840,655.89 2028 25,555,000.00 $3,815,000.00 $ 21,740,000.00 34 12.000000% 365 243,011.51 21,983,011.51 2029 21,740,000.00 $3,970,000.00 $ 17,770,000.00 34 12.000000% 365 198,634.52 17,968,634.52 2030 17,770,000.00 $4,155,000.00 $ 13,615,000.00 34 12.000000% 365 152,189.59 13,767,189.59 2031 13,615,000.00 $4,340,000.00 $ 9,275,000.00 34 12.000000% 365 103,676.71 9,378,676.71 2032 9,275,000.00 $4,530,000.00 $ 4,745,000.00 34 12.000000% 365 53,040.00 4,798,040.00 2033 4,745,000.00 $4,745,000.00 $ - 34 12.000000% 365 - - #17..
- 1101 -
4925-1705-8454.5
Exhibit A-5
Sinking Fund
Installment Date
(September 1)
Sinking Fund
Installments
Sinking Fund
Installment Date
(September 1)
Sinking Fund
Installments
2009 $895,000 2022 $2,585,000
2010 $1,020,000 2023 $2,785,000
2011 $1,125,000 2024 $2,990,000
2012 $1,260,000 2025 $3,240,000
2013 $1,395,000 2026 $3,470,000
2014 $1,505,000 2027 $3,730,000
2015 $1,665,000 2028 $3,815,000
2016 $1,835,000 2029 $3,970,000
2017 $1,695,000 2030 $4,155,000
2018 $1,860,000 2031 $4,340,000
2019 $2,000,000 2032 $4,530,000
2020 $2,170,000 2033* $4,745,000
2021 $2,390,000
* Final Maturity
#17..
- 1102 -
302724549.3
SUPPLEMENT NO. 1, DATED JUNE 2, 2026, TO REMARKETING MEMORANDUM DATED JUNE 2, 2023 NOT A NEW ISSUE—BOOK-ENTRY ONLY RATINGS:
(See “RATINGS” herein.)
$47,625,000*
CITY OF MODESTO, CALIFORNIA
WATER REFUNDING REVENUE CERTIFICATES OF PARTICIPATION
2008 SERIES A
Dated: Date of Original Delivery (May 30, 2008) Price: 100% CUSIP† 607804AC5 Due: October 1, 2036 This Supplement No. 1 to Remarketing Memorandum (this “Supplement”) sets forth certain information supplementary to that information contained in the Remarketing Memorandum dated June 2, 2023 (the “Original Remarketing Memorandum”), relating to the City of Modesto, California Water Refunding Revenue Certificates of Participation, 2008 Series A (the “2008 Certificates”). The 2008 Certificates were executed and delivered on May 30, 2008, pursuant to the Amended and Restated Trust Agreement, dated as of May 1, 2008 (the “Amended and Restated Trust Agreement”), by and between the Modesto Public Financing Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), for the principal purpose of refinancing certain improvements to the Water Utility System of the City of Modesto (the “City”). In connection with a mandatory tender and remarketing of the 2008 Certificates on June 2, 2023, the Authority and the Trustee entered into a First Supplemental Trust Agreement, dated as of June 1, 2023, supplementing and amending the Amended and Restated Trust Agreement. The Amended and Restated Trust Agreement, as so supplemented and amended, is referred to herein as the “Trust Agreement.” Information with respect to the 2008 Certificates is contained in the Original Remarketing Memorandum, as supplemented by this Supplement. This Supplement should be read together with the Original Remarketing Memorandum (a copy of which is attached hereto as Appendix A and incorporated herein by reference). To the extent that the information in this Supplement conflicts with the information in the Original Remarketing Memorandum, this Supplement shall govern. No attempt has been made to update the Original Remarketing Memorandum except as specifically set forth in this Supplement.
Unless otherwise defined in this Supplement, all terms used herein shall have the same meanings as those terms in the Original Remarketing Memorandum.
The 2008 Certificates were issued and are currently in a Weekly Mode. While the 2008 Certificates are in the Weekly Mode, they are subject to optional and mandatory tender for purchase under the circumstances described herein. The payment of the purchase price of the 2008 Certificates will be payable from the proceeds of remarketing of the 2008 Certificates, and, to the extent remarketing proceeds are unavailable, and subject to certain terms and conditions, from amounts available under a Standby Certificate Purchase Agreement, dated as of June 1, 2023, as amended by an Amendment No. 1 to Standby Certificate Purchase Agreement (as so amended, the “Liquidity Facility”), by and among the Authority, the City and BMO Bank N.A. (formerly known as BMO Harris Bank N.A.) (the “Liquidity Facility Provider”).
The obligation of the Liquidity Facility Provider to purchase tendered but unremarketed 2008 Certificates is subject to suspension or termination without notice upon the occurrence of certain events. Unless extended or terminated, the Liquidity Facility will expire on June [__], 202[__]. The Liquidity Facility does not support, secure or guaranty the payments of the principal of, premium, if any, or interest with respect to the 2008 Certificates.
The scheduled payment of principal of and interest with respect to the 2008 Certificates when due are guaranteed under a financial guaranty insurance policy that was issued concurrently with the delivery of the 2008 Certificates by Assured Guaranty Corp.
PNC Capital Markets LLC currently serves as remarketing agent for the 2008 Certificates (the “Remarketing Agent”). * Original principal amount. As of the date of this Remarketing Memorandum the 2008 Certificates are outstanding in the principal amount of $40,400,000. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Authority, the City, its Municipal Advisor or the Remarketing Agent is responsible for the selection or use of these CUSIP numbers and no representation is made as to their correctness on the 2008 Certificates or as indicated above. The CUSIP number for a specific certificate is subject to being changed after the issuance of the certificate as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of such certificates.
#17..
- 1103 -
TABLE OF CONTENTS
Page
302724549.3 i
INTRODUCTION ..........................................................................................................................1 LIQUIDITY FACILITY.................................................................................................................2 Liquidity Facility ................................................................................................................2 BMO Bank N.A..................................................................................................................8 RATINGS.......................................................................................................................................8 MISCELLANEOUS.......................................................................................................................9 APPENDIX A – COPY OF REMARKETING MEMORANDUM,
DATED JUNE 2, 2023..................................................................................A-1 #17..
- 1104 -
1 Supplement No. 1, dated June 2, 2026, to Remarketing Memorandum relating to
$47,625,000*
CITY OF MODESTO, CALIFORNIA
WATER REFUNDING REVENUE CERTIFICATES OF PARTICIPATION
2008 SERIES A
INTRODUCTION
The purpose of this Supplement No. 1 to Remarketing Memorandum (this “Supplement”) is to supplement the Remarketing Memorandum dated June 2, 2023 (the “Original Remarketing Memorandum”), relating to the City of Modesto Refunding Water Revenue Certificates of Participation, 2008 Series A (the “2008 Certificates”), evidencing and representing the proportionate interests of the Owners thereof in certain payments to be made by the City of Modesto, California (the “City”). The 2008 Certificates were executed and delivered pursuant to the Amended and Restated Trust Agreement, dated as of May 1, 2008 (the “Amended and Restated Trust Agreement”), by and between the Modesto Public Financing Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). In connection with a mandatory tender and remarketing of the 2008 Certificates on June 2, 2023, the Authority and the Trustee entered into a First Supplemental Trust Agreement, dated as of June 1, 2023, supplementing and amending the Amended and Restated Trust Agreement. The Amended and Restated Trust Agreement, as so supplemented and amended, is referred to herein as the “Trust Agreement.” The 2008 Certificates are currently outstanding in the aggregate principal amount of $40,400,000.
This Supplement provides information concerning the extension to June [__], 202[__] of the stated expiration date of the Standby Certificate Purchase Agreement, dated as of June 1, 2023 (the “Existing Liquidity Facility”), by and among the Authority, the City and BMO Bank N.A. (formerly known as BMO Harris Bank N.A.) (the “Liquidity Facility Provider”). In connection with the extension of the stated expiration date of the Existing Liquidity Facility by the Liquidity Facility Provider, the Authority, the City and the Liquidity Facility Provider has entered into an Amendment No. 1 to Standby Certificate Purchase Agreement (the “Amendment No. 1”), amending the Existing Liquidity Facility (the Existing Liquidity Facility, as so amended, the “Liquidity Facility”).
While the 2008 Certificates are in the Weekly Mode, they are subject to optional and mandatory tender for purchase. Payment of the purchase price of the 2008 Certificates will be payable from the proceeds of remarketing of the 2008 Certificates, and, to the extent remarketing proceeds are unavailable, and subject to certain terms and conditions, from amounts available under the Liquidity Facility. The obligation of the Liquidity Facility Provider to purchase tendered but unremarketed 2008 Certificates is subject to suspension or termination without notice upon the occurrence of certain events. Unless extended or terminated, the Liquidity Facility will expire on June [__], 202[__].
The Liquidity Facility does not support, secure or guaranty the payments of the principal of, premium, if any, or interest with respect to the 2008 Certificates. For a description of the Liquidity Facility and information concerning the Liquidity Facility Provider, see “LIQUIDITY FACILITY” below in this Supplement.
The Liquidity Facility Provider has provided only the information related to itself set forth under the heading “LIQUIDITY FACILITY – BMO Bank N.A.” for inclusion in this Supplement and has not provided any other information for this Supplement. No representation is made herein as to the accuracy or adequacy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof, or that the information given below or incorporated herein by reference is correct as of any time subsequent to its date. The Liquidity Facility Provider has not (i) independently verified or reviewed, (ii) made any representation regarding, nor (iii) accepted any responsibility for the accuracy or completeness of, this Supplement or the Original Remarketing Memorandum or any information or disclosure contained herein or therein, other than solely with respect to the information with respect to itself set forth in this Supplement under the heading “LIQUIDITY FACILITY – BMO Bank N.A.”
* Original principal amount. As of the date of this Remarketing Memorandum the 2008 Certificates are outstanding in the principal amount of $40,400,000.
#17..
- 1105 -
2 Information with respect to the 2008 Certificates is contained in the Original Remarketing Memorandum, as supplemented by this Supplement. This Supplement should be read together with the Original Remarketing Memorandum (a copy of which is attached hereto as Appendix A and incorporated herein by reference). To the extent that the information in this Supplement conflicts with the information in the Original Remarketing Memorandum, this Supplement shall govern. No attempt has been made to update the Original Remarketing Memorandum except as specifically set forth in this Supplement. Unless otherwise defined in this Supplement, all terms used herein shall have the same meanings as those terms in the Original Remarketing Memorandum.
LIQUIDITY FACILITY
The following summary of certain provisions of the Liquidity Facility does not purport to be complete or definitive, does not constitute a complete summary of the Liquidity Facility, and is qualified in its entirety by reference to the complete provisions of the Liquidity Facility, which is available from the Authority, City or the Remarketing Agent. Investors should obtain and review a copy of the Liquidity Facility in order to understand all of the terms of the document. The provisions of any substitute liquidity facility or credit facility may be different from those summarized below.
See “RISK FACTORS – Limitations of the Liquidity Facility” in the Original Remarketing Memorandum.
Liquidity Facility
The Liquidity Facility secures only payment of the purchase price of the 2008 Certificates bearing interest at a Weekly Rate tendered for purchase, and does not otherwise secure payment of the principal of or interest on the 2008 Certificates. The Liquidity Facility is subject to termination at the option of the Liquidity Facility Provider as described below.
General. The Liquidity Facility contains various provisions, covenants and conditions, certain of which are summarized below. Capitalized terms used in the following summary are defined in this Supplement or the Liquidity Facility and reference thereto is made for full understanding of their import. The Liquidity Facility will have a stated expiration date of June [__], 202[__].
Defined Terms. As used below, the following terms shall have the meanings set forth below:
“Available Commitment” means on any day the sum of the Available Principal Commitment and the Available Interest Commitment on such day.
“Available Interest Commitment” means for each Weekly Rate Period $487,776, representing an amount equal to 35 days of interest on the Available Principal Commitment calculated at the assumed rate of interest of 12% per annum (on the basis of actual days elapsed and a 365-day year) and rounded up to the nearest dollar. The Available Interest Commitment shall increase or decrease concurrently and proportionately with each increase or decrease in the Available Principal Commitment. Notwithstanding the foregoing provisions of this defined term, in no event shall the Available Interest Commitment exceed $487,776.
“Available Principal Commitment” means initially $42,390,000.00 and thereafter means such amount adjusted from time to time as follows: (a) downward by the amount of any reduction or termination of the Available Principal Commitment pursuant to the provisions of the Liquidity Facility, (b) downward by the principal amount of any Certificates purchased by the Liquidity Facility Provider pursuant to the Liquidity Facility; and (c) upward by the principal amount of any Certificates theretofore purchased by the Liquidity Facility Provider pursuant to the Liquidity Facility, which are repurchased upon a successful remarketing in accordance with the Trust Agreement or are prepaid pursuant to the terms of the Liquidity Facility and for which the Liquidity Facility Provider has received immediately available funds equal to the principal amount thereof and accrued interest thereon, or which cease to bear interest at the Bank Rate pursuant to the provisions of the Liquidity Facility; provided that after giving effect to such adjustment the Available Principal Commitment shall never exceed $42,390,000. Any adjustment pursuant to clause (a), (b) or (c) in this defined term shall occur simultaneously with the event requiring such adjustment. #17..
- 1106 -
3 “Debt” of any Person means at any date, without duplication, (a) all obligations of such person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business; (d) all obligations of such Person as lessee under capital leases; (e) all Debt of others secured by a lien on any asset of such Person, whether or not such Debt is assumed by such Person; and (f) all obligations, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other person including, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement condition or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that with respect to the City, Debt shall exclude conduit, enterprise and other Debt that have no claim on the General Fund of the City other than obligations payable from the Revenue Fund. “Defaulted Interest” means accrued interest payable on a 2008 Certificate, which was not paid when due under the terms of the Trust Agreement.
“Eligible Certificate” means any 2008 Certificate bearing interest at the Weekly Rate other than Liquidity Provider Certificates and 2008 Certificates owned by, for the account of, or on behalf of, the Authority or the City. “Extended Bank Purchase Period” means, upon the City’s written request for extension and the Liquidity Facility Provider’s agreement thereto, the period from the then current Stated Expiration Date to such new Stated Expiration Date.
“Notice of Bank Purchase” means a notice in a specified form appropriately completed and executed by the Trustee requesting the Liquidity Facility Provider to purchase Eligible Certificates during the Bank Purchase Period as a result of an optional tender or a mandatory purchase. “Other Event of Insolvency” means the occurrence and continuance of one or more of the following events:
(a) the Authority or the City shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code (the “Bankruptcy Code”) or any other federal, state or foreign bankruptcy, insolvency or similar law, (ii) consent to the institution of, or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for itself or for a substantial part of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take action for the purpose of effecting any of the foregoing; or (b) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Authority, the City or of a substantial part of the property of the Authority or the City, under the Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency or similar law or (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official for the Authority, the City or for a substantial part of the property of the Authority or the City, and such proceeding or petition shall continue undismissed and unstayed for 60 days; or an order or decree for relief shall be entered against the Authority or the City under the Bankruptcy Code as now or hereafter in effect.
“Purchase Date” means the date on which the Liquidity Facility Provider purchases Eligible Certificates following its receipt of a Notice of Bank Purchase.
“Related Documents” means the fee letter agreement relating to the Liquidity Facility, the 2008 Certificates, the Trust Agreement, the Contract, the custodian agreement relating to the Liquidity Facility, this Remarketing Memorandum, the 2008 Certificate Insurance Policy and the Remarketing Agreement. “Stated Expiration Date” means the later of (a) June [__], 202[__] and (b) the last day of the Extended Bank Purchase Period as extended from time to time at the request of the City pursuant to the Liquidity Facility or, if any such day is not a Business Day, the next preceding Business Day to such day. #17..
- 1107 -
4 “2008 Certificate Insurer Event of Insolvency” means the occurrence and continuance of one or more of the following events: (a) the issuance by an oversight body or court of appropriate jurisdiction, under the laws of the state of incorporation or formation of the 2008 Certificate Insurer, of an order of relief (including a seizure order or injunction), rehabilitation, reorganization, conservation or liquidation of the 2008 Certificate Insurer; (b) the commencement by the 2008 Certificate Insurer of a voluntary case or other proceeding seeking an order for relief, rehabilitation, reorganization, conservation or liquidation with respect to the 2008 Certificate Insurer or its debts or claims under any bankruptcy, insolvency or other similar law now or hereafter in effect including, without limitation, the appointment of a trustee, receiver, liquidator, custodian, assignee, sequestrator or other similar official for the 2008 Certificate Insurer or any substantial part of its property; (c) the commencement by an oversight body or court of appropriate jurisdiction of a delinquency proceeding or an involuntary case or other proceeding seeking an order for relief (including a seizure order or injunction), rehabilitation, reorganization, conservation or liquidation with respect to the 2008 Certificate Insurer or its debts or claims under any bankruptcy, insolvency or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian, assignee, sequestrator or other similar official for the 2008 Certificate Insurer or any substantial part of its property, and such involuntary case or appointment remains undismissed and unstayed for a period of 90 consecutive days; (d) the consent of the 2008 Certificate Insurer to any relief referred to in the preceding clause (c) in an involuntary case or other proceeding commenced against it; (e) the making by the 2008 Certificate Insurer of a general assignment for the benefit of creditors; (f) the 2008 Certificate Insurer admits in writing its inability to pay its debts generally as they become due or claims under any of its insurance policies as such claims are made; or (g) the board of directors or any senior officer of the 2008 Certificate Insurer shall take any action to authorize any of the foregoing.
Commitment to Purchase 2008 Certificates. Upon compliance with the terms and conditions of the Liquidity Facility, and subject to the terms and conditions set forth therein, the Liquidity Facility requires the Liquidity Facility Provider, at the request of the Trustee, to purchase from time to time during the Bank Purchase Period at the Purchase Price, with its own immediately available funds, Eligible Certificates tendered or deemed tendered for purchase pursuant to an optional tender or a mandatory purchase and which, in either case, the Remarketing Agent has been unable to remarket. The aggregate principal amount of any 2008 Certificate purchased by the Liquidity Facility Provider on a Purchase Date shall be an authorized denomination applicable to 2008 Certificates bearing interest at the Weekly Rate, and in any case the aggregate principal amount of all 2008 Certificates purchased on the applicable Purchase Date shall not exceed the Available Principal Commitment on such date (calculated immediately before giving effect to any such purchase of 2008 Certificates by the Liquidity Facility Provider on such date). The aggregate amount of the Purchase Price comprising interest on the 2008 Certificates (the “Interest Component”) purchased on a Purchase Date shall not exceed the lesser of (a) the Available Interest Commitment on such date and (b) the actual aggregate amount of interest accrued and unpaid on each such 2008 Certificate, other than Defaulted Interest, to but excluding a Purchase Date; provided that if a Purchase Date is an Interest Payment Date the amount described in this clause (b) shall be reduced by the amount of interest payable on each such 2008 Certificate on such Interest Payment Date.
Any Eligible Certificates so purchased by the Liquidity Facility Provider will constitute Liquidity Provider Certificates and will bear interest at the Bank Rate in accordance with the Liquidity Facility.
The Bank Purchase Period means the period from the Effective Date to and including the earliest of (a) the Stated Expiration Date then in effect; (b) the first Business Day following the date on which the Interest Period for all of the 2008 Certificates ceases to be a Weekly Rate Period; (c) the close of business of the Liquidity Facility Provider on the Business Day following the Substitution Date; (d) the Purchase Termination Date (except to the extent that purchases are permitted on the Termination Date following delivery of a Notice of Termination); (e) the date on which no 2008 Certificates are Outstanding; and (f) the date on which the Available Commitment is terminated in whole upon substitution by the City of the Liquidity Facility with an Alternate Liquidity Facility.
If the Liquidity Facility Provider receives a Notice of Bank Purchase from the Trustee at or before 9:30 a.m. (California time) on a Business Day during the Bank Purchase Period to purchase Eligible Certificates during the Bank Purchase Period as a result of an optional tender or a mandatory purchase, the Liquidity Facility Provider will, unless it determines that any applicable condition to the obligation of the Liquidity Facility Provider to purchase any of the Eligible Certificates under the Liquidity Facility on such date is not satisfied, transfer not later than 11:30 a.m. (California time) on the same Business Day to the Trustee, in funds of the Liquidity Facility Provider to be available #17..
- 1108 -
5 as specified in such Notice of Bank Purchase, an amount equal to the aggregate Purchase Price of such Eligible Certificates.
Termination of the Liquidity Facility Provider’s Commitment to Purchase 2008 Certificates. Upon the occurrence of certain specified Events of Default, the Available Commitment and the obligation of the Liquidity Facility Provider to purchase 2008 Certificates shall immediately terminate without notice or demand, as described below under “Remedies — Immediate Termination. Upon the occurrence of certain other specified Events of Default, the Liquidity Facility Provider may terminate the Available Commitment by given written notice specifying the date on which the Available Commitment shall terminate, which shall be not less than thirty (30) days from the date of receipt of such notice, as described below under “Remedies — Termination With Notice.” Upon the occurrence of certain other specified insolvency events or Events of Default, the Liquidity Facility Provider’s obligation to purchase Eligible Certificates under the Liquidity Facility shall immediately be suspended without further action, as described below under “Remedies — Immediate Suspension.”
Events of Default. Each of the following events shall constitute an “Event of Default” under the Liquidity Facility:
(a) any principal or interest due on the 2008 Certificates is not paid by the Authority when due and such principal or interest is not paid by the 2008 Certificate Insurer when, as and in the amounts required to be paid pursuant to the terms of the 2008 Certificate Insurance Policy; or (b) a 2008 Certificate Insurer Event of Insolvency shall have occurred; or (c) (i) the 2008 Certificate Insurance Policy, with respect to the payment of principal or interest on the 2008 Certificates, at any time for any reason ceases to be valid and binding on the 2008 Certificate Insurer in accordance with the terms of the 2008 Certificate Insurance Policy or is declared or ruled to be null and void by a court or other governmental agency of appropriate jurisdiction; or (ii) the 2008 Certificate Insurer shall (A) in writing to the Trustee claim that the 2008 Certificate Insurance Policy with respect to the payment of principal or interest on the 2008 Certificates is not valid and binding on the 2008 Certificate Insurer, (B) repudiate in writing the obligations of the 2008 Certificate Insurer under the 2008 Certificate Insurance Policy with respect to payment of principal of or interest due on the 2008 Certificates, or (C) initiate legal proceedings seeking an adjudication that the 2008 Certificate Insurance Policy, with respect to the payment of principal or interest on the 2008 Certificates, is not valid and binding on the 2008 Certificate Insurer; or
(d) the 2008 Certificate Insurer shall default in any payment or payments of amounts payable by it under any insurance policy or policies that insure or support the payment of principal and interest on municipal obligations (other than the 2008 Certificate Insurance Policy) when due and such default shall continue for a period of thirty (30) days; (it being understood by the Liquidity Facility Provider that default, for the purposes of this paragraph, shall not mean a situation whereby the 2008 Certificate Insurer contests in good faith its liability under any such policy or policies in light of the claim or claims made thereunder); or (e) any material representation or warranty made by the Authority or the City under or in connection with the Liquidity Facility or in any Related Document shall prove to be untrue in any material respect on the date as of which it was made; or
(f) any Other Event of Insolvency shall have occurred; or (g) (i) nonpayment of any fees due to the Liquidity Facility Provider hereunder pursuant to the Liquidity Facility, if such failure to pay when due shall continue for ten (10) Business Days after the City, the Authority and the 2008 Certificate Insurer have received written notice thereof from the Liquidity Facility Provider; or (ii) nonpayment of any other amounts payable to the Liquidity Facility Provider under the Liquidity Facility or under any of the Related Documents and such failure is not cured within 20 days after the City, the Authority and the 2008 Certificate Insurer have received written notice thereof from the Liquidity Facility Provider; or #17..
- 1109 -
6 (h) the breach by the Authority or the City of any of the terms or provisions of certain specified covenants set forth in the Liquidity Facility; or
(i) the Authority shall default in the performance or observance of any other material covenant or agreement contained (or incorporated by reference) in the Liquidity Facility and such default shall continue unremedied for a period of thirty (30) days after the Authority has received written notice thereof from the Liquidity Facility Provider; or
(j) the City shall default in the performance or observance of any other material covenant or agreement contained (or incorporated by reference) in the Liquidity Facility and such default shall continue unremedied for a period of thirty (30) days after the City has received written notice thereof from the Liquidity Facility Provider; or (k) any provision of the Liquidity Facility or any of the Related Documents ceases to be valid and binding against the Authority or the City or shall be declared null and void or the Authority or the City repudiates its obligations under the Liquidity Facility or any of the Related Documents or the pledge and assignment pursuant to the Liquidity Facility and the Related Documents shall for any reason cease to be fully enforceable with the priority required hereunder and thereunder; or
(l) the occurrence of any “event of default” under any of the Related Documents which is not otherwise specified as another Event of Default, other than the failure of the Liquidity Facility Provider to provide funds for the purchase of Eligible Certificates when required by the terms and conditions of the Liquidity Facility; or (m) the Trustee ceases to have an effective security interest in the Trust Estate prior to any lien, pledge, assignment or security interest of any creditors of the City or the Authority; or (n) (i) each of S&P and Moody’s shall suspend or withdraw the long-term rating on the 2008 Certificates for credit related reasons or shall reduce such rating below BBB- (or its equivalent) in the case of S&P and Baa3 (or its equivalent) in the case of Moody’s, or (ii) the long term claims-paying or financial strength rating of the 2008 Certificate Insurer is lowered below A3 (or its equivalent) and A- (or its equivalent) by each of Moody’s, and S&P, respectively; or
(o) the City shall default in any payment of principal of or premium, if any, or interest on any of its Debts in excess of $500,000 and such default shall continue beyond the expiration of the applicable grace period, if any, or the City shall fail to perform any other agreement, term or condition contained in any agreement under which any obligation for the payment of $500,000 or more is created or secured, which shall permit or result in the declaring due and payable of such obligation prior to the date on which it would otherwise have become due and payable; or (p) a final judgment or order for the payment of money for an uninsured claim in excess of $500,000 shall have been rendered against the City and such judgment or order shall not have been satisfied, stayed or bonded pending appeal within a period of thirty (30) days from the date on which it was first so rendered; or (q) any cancellation, termination, replacement, amendment, replacement or other modification of the 2008 Certificate Insurance Policy or substitution of the 2008 Certificate Insurer occurs without the prior written consent of the Liquidity Facility Provider; or
(r) the long-term, unenhanced rating of the Revenue Fund shall be withdrawn or suspended or otherwise unavailable for credit-related reasons or reduced below Baa1 (or its equivalent) in the case of Moody’s, BBB+ (or its equivalent) in the case of S&P or BBB+ (or its equivalent) in the case of Fitch; provided that in the event of split ratings, the default will be determined by reference to the lowest rating; or (s) a moratorium shall have been declared with respect to the payment of the debts of the Authority or the City; or
(t) any of the funds or accounts established pursuant to the Trust Agreement or the Contract or any funds or accounts on deposit, or otherwise to the credit of, such funds or accounts shall become subject to any stay, #17..
- 1110 -
7 writ, judgment, warrant of attachment, execution or similar process by any of the creditors of the City or the Authority and such stay, writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or stayed within thirty (30) days after its issue or levy; or (u) an event shall have occurred that in the opinion of the Liquidity Facility Provider has a material adverse effect on the financial condition, operations or prospects of the City or its ability to perform its obligations under the Liquidity Facility or any Related Document.
Remedies.
Immediate Termination. In the case of an Event of Default specified in paragraphs (a), (b), (c)(i), (d), (n)(i) or (q) above (each, a “Termination Event”), the Available Commitment and the obligation of the Liquidity Facility Provider to purchase 2008 Certificates shall immediately terminate without notice or demand, and thereafter the Liquidity Facility Provider shall be under no obligation to purchase 2008 Certificates. Promptly after the Liquidity Facility Provider receives written notice of such Termination Event, the Liquidity Facility Provider shall give written notice of the same to the Trustee, the Authority, the City, the Rating Agencies and the Remarketing Agent; provided, that the Liquidity Facility Provider shall incur no liability or responsibility whatsoever by reason of its failure to give such notice and such failure shall in no way affect the termination of the Available Commitment and of the Liquidity Facility Provider’s obligation to purchase Eligible Certificates pursuant to the Liquidity Facility.
Termination With Notice. Upon the occurrence and during the continuance of an Event of Default specified in paragraphs (g)(i) or (n)(ii) above, the Liquidity Facility Provider may terminate the Available Commitment by giving written notice (a “Notice of Termination”) to the City, the Trustee, the Remarketing Agent and the 2008 Certificate Insurer, specifying the date on which at 3:00 p.m. California time the Available Commitment shall terminate (the “Termination Date”), which shall be not less than thirty (30) days from the date of receipt of such notice by the Trustee, and after the Termination Date the Liquidity Facility Provider shall be under no further obligation to purchase 2008 Certificates hereunder other than 2008 Certificates which are the subject of the Notice of Liquidity Facility Provider Purchase delivered by the Trustee in accordance with the provisions of the Liquidity Facility and received by the Liquidity Facility Provider on or prior to the Termination Date.
Immediate Suspension. In the case of (i) the occurrence of an Event of Default of the type specified in paragraph (c)(ii) above or (ii) the commencement of an involuntary case or other involuntary proceeding seeking an order for relief, rehabilitation, reorganization, conservation, liquidation or dissolution with respect to the 2008 Certificate Insurer or its debts or claims under any bankruptcy, insolvency or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian, assignee, sequestrator or other similar official for the 2008 Certificate Insurer or any substantial part of its property (an “Involuntary Insolvency Event”), the Liquidity Facility Provider’s obligation to purchase Eligible Certificates hereunder shall immediately be suspended without further action on the part of any Person. Upon such a suspension, the Liquidity Facility Provider shall give written notice thereof to the City, the Trustee, the Remarketing Agent and the 2008 Certificate Insurer; provided, however, that the failure of the Liquidity Facility Provider to give such notice shall not affect the validity of such suspension. The obligation of the Liquidity Facility Provider to purchase Eligible Certificates shall be suspended until either (x) the Liquidity Facility Provider delivers a written notice to the Trustee rescinding the automatic suspension of its obligation to purchase Eligible Certificates under the Liquidity Facility (a “Rescission Notice”) or, (y)(1) in the case of a suspension event upon an Event of Default specified in paragraph (c)(ii) above, a final non-appealable order of a court having jurisdiction in the premises shall be entered declaring that all material contested provisions of the 2008 Certificate Insurance Policy are upheld in their entirety or (2) in the case of an Involuntary Insolvency Event, a court having jurisdiction in the premises shall dismiss or stay such involuntary case, proceeding or appointment within 60 days. In the event a final non-appealable order is entered declaring any material provision of the 2008 Certificate Insurance Policy to be null and void, or declaring that the 2008 Certificate Insurer does not have any further liability or obligation under the 2008 Certificate Insurance Policy or in the event an Involuntary Insolvency Event is not dismissed or stayed within 60 days by a court having jurisdiction in the premises, then the obligation of the Liquidity Facility Provider to purchase Eligible Certificates shall immediately terminate without any further action by any Person. In the event a final non-appealable order is entered declaring that all material contested provisions of the 2008 Certificate Insurance Policy are upheld in their entirety or in the event a court having jurisdiction in the premises shall dismiss or stay any Involuntary Insolvency Event within 60 days, the obligation of the Liquidity Facility Provider to purchase Eligible Certificates shall be automatically reinstated and the terms of the Liquidity Facility will continue in #17..
- 1111 -
8 full force and effect (unless the Bank Purchase Period shall have otherwise expired or terminated) as if there had been no such suspension. Notwithstanding the foregoing, if the Liquidity Facility Provider has not delivered a Rescission Notice to the Trustee and if, upon the earlier of (a) the last day of the Bank Purchase Period or (b)(i) in the case of the occurrence of an Event of Default specified in paragraph (c)(ii) above, the date which is three years after the effective date of suspension of the obligation of the Liquidity Facility Provider to purchase Eligible Certificates, litigation is still pending and a judgment regarding the validity of the 2008 Certificate Insurance Policy has not been obtained or (ii) in the case of the occurrence of an Involuntary Insolvency Event, the date which is 60 days after the commencement of the involuntary case, proceeding or appointment, such involuntary case, proceeding or appointment has not been dismissed or stayed, then the Available Commitment and the obligation of the Liquidity Facility Provider to purchase Eligible Certificates shall at such time terminate without notice or demand and thereafter the Liquidity Facility Provider shall be under no further obligation to purchase Eligible Certificates.
Other Remedies. In addition to the rights and remedies set forth above under “Immediate Termination,” “Termination With Notice” and “Immediate Suspension,” in the case of any Event of Default, upon the election of the Liquidity Facility Provider: (i) all amounts payable hereunder (other than payments of principal and interest on Liquidity Provider Certificates) shall upon notice to the City become immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Authority and the City, and (ii) the Liquidity Facility Provider shall have all the rights and remedies available to it under the Liquidity Facility, the Related Documents or otherwise pursuant to law or equity other than acceleration of the 2008 Certificates or termination of its obligation to purchase 2008 Certificates.
BMO Bank N.A.
The following information has been provided by BMO Bank N.A. It has not been verified by the Authority or the City, and neither the Authority nor the City guarantees its accuracy or completeness.
Except for the contents under this subheading, BMO Bank N.A. did not participate in the preparation of, or in any way verify the information in, any other part of this Remarketing Memorandum and assumes no responsibility for the nature, contents, accuracy or completeness of the information set forth in this Remarketing Memorandum.
BMO Bank N.A. (“BBNA”), with executive offices in Chicago, Illinois, is a wholly-owned subsidiary of BMO Financial Corp., a Delaware corporation (“BFC”). BFC is based in Chicago and wholly-owned by Bank of Montreal (“BMO”) (NYSE, TSX: BMO). BFC operates primarily through its subsidiary BBNA, which provides banking, financing, investing and cash management services in the United States. BMO brands the organization’s member companies as BMO Financial Group (“BMO FG”). BMO FG is a highly diversified financial services provider based in North America, providing a broad range of products and services directly and through Canadian and non-Canadian subsidiaries, offices, and branches.
Additional information about BBNA and BMO is available on SEDAR (http://www.sedar.com), EDGAR (http://www.sec.gov) and on BMO’s website (https://www.bmo.com/main/about-bmo/banking/investor-relations), or will be provided without charge upon written request directed to: Bank of Montreal, Corporate Secretary’s Department, 100 King Street West, 1 First Canadian Place, 9th Floor, Toronto, Ontario M5X 1A1. The financial information referenced in this paragraph is not incorporated by reference into this Supplement.
The Liquidity Facility is an obligation solely of BBNA and is not an obligation of, or otherwise guaranteed by, BFC, BMO or any of their respective affiliates (other than BBNA). Neither BFC, BMO or any of their respective affiliates (other than BBNA) is required to make payments under the Liquidity Facility. None of BBNA, BFC, BMO or any of their respective affiliates makes any representation as to, or is responsible for the suitability of the 2008 Certificates for any investor, the feasibility or performance of any project or compliance with any securities or tax laws or regulations. The 2008 Certificates are not direct obligations of, or guaranteed by, the BBNA, BFC, BMO or any of their respective affiliates.
The above information has been supplied by BBNA. The delivery of the information in this Supplement shall not create any implication that there has been no change in the affairs of BMO or BBNA since the date such information was provided by BBNA, or that the information contained or referred to in this Supplement is correct as of any time subsequent to the date it was provided by BBNA. #17..
- 1112 -
9 RATINGS
Moody’s Ratings (“Moody’s”) and S&P Global Ratings (“S&P”) have assigned their long-term ratings of “[A2]” and “[AA]” respectively, to the 2008 Certificates based upon the 2008 Certificate Insurance Policy by Assured Guaranty. Moody’s and S&P have also assigned their underlying long-term ratings of “[Aa3]” and “[AA]” respectively, to the 2008 Certificates. Moody’s and S&P also assigned their short-term ratings of “[P-1]” and “[A1]” respectively, to the 2008 Certificates based on the delivery of the Liquidity Facility. Generally, rating agencies base their ratings on information and material furnished directly to them and on investigations, studies and assumptions made by them. The ratings reflect only the views of such organizations and an explanation of the significance of such rating may be obtained from the rating agency furnishing such rating. There is no assurance that the rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency, if, in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the 2008 Certificates.
See “RISK FACTORS - Ratings May Be Lowered or Withdrawn; Unsolicited Ratings” in the Original Remarketing Memorandum.
MISCELLANEOUS
Reference is made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive, and reference is made to such documents and complete statement of the contents thereof.
Any statements in this Supplement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Supplement is not to be construed as a contract or agreement between the City and the purchasers or holder of any 2008 Certificates.
The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Supplement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the City or the Liquidity Facility Provider since the date hereof.
#17..
- 1113 -
10 The execution and delivery of this Supplement have been duly authorized by the City and the Authority.
CITY OF MODESTO, CALIFORNIA
By: /s/ DeAnna Christensen
Finance Director
MODESTO PUBLIC FINANCING AUTHORITY
By: /s/ DeAnna Christensen
Auditor and Treasurer
#17..
- 1114 -
302724549.3 A-1
APPENDIX A
COPY OF REMARKETING MEMORANDUM, DATED JUNE 2, 2023
#17..
- 1115 -
4899-3009-3974.5
AMENDED AND RESTATED FEE LETTER AGREEMENT
May [__], 2026
City of Modesto
1010 Tenth Street, Suite 5200
Modesto, California 95354
Modesto Public Financing Authority
c/o City of Modesto
1010 Tenth Street, Suite 5200
Modesto, California 95354
Re: City of Modesto Water Refunding Revenue Certificates of Participation, 2008 Series A
Ladies and Gentlemen:
Reference is hereby made to that certain Standby Certificate Purchase Agreement, dated as of June 1, 2023 (the “Original Agreement”), by and among the Modesto Public Financing Authority (the “Authority”), the City of Modesto (the “City”), The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), and BMO Bank N.A. (formerly known as BMO Harris Bank N.A., the “Bank”), as amended by that certain Amendment No. 1 to Standby Certificate Purchase Agreement, dated May [__], 2026 (the “Standby Certificate Purchase Agreement Amendment No. 1” and the Original Agreement, as amended by the Standby Certificate Purchase Agreement Amendment No. 1 and as the same may be further amended or supplemented from time to time, the “Agreement”), by and among the Authority, the City, the Trustee and the Bank, supporting the above-referenced Certificates. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.
In connection with the Original Agreement, the Bank, the City and the Authority executed that certain Fee Letter Agreement dated June 8, 2023 (the “Prior Fee Agreement”). This Amended and Restated Fee Letter Agreement, dated May [__], 2026 (this “Fee Letter Agreement”) among the Authority, the City and the Bank, as the same may be amended or supplemented from time to time, is the “Fee Letter Agreement” referenced in the Agreement, and the terms hereof are incorporated by reference into the Agreement as if fully set forth therein. The Authority, the City and the Bank hereby agree that the Extension Closing Date shall be the date hereof.
In consideration for the issuance of the Agreement pursuant to the terms of the Agreement, the parties hereto agree as follows:
ARTICLE I. FEES AND PAYMENTS.
Section 1.1. Commitment Fee. The Authority and the City (by payment of Additional Payments) hereby agree to pay or cause to be paid to the Bank a nonrefundable commitment fee (the “Commitment Fee”), which, for the period from June 8, 2023 through June [8], 2026, shall be #17..
- 1116 -
4899-3009-3974.5
- 2 -
the “Commitment Fee Rate” as set forth in the Prior Fee Agreement (which provisions, for purposes of determining the Commitment Fee in effect for the period from June 8, 2023 through June [8], 2026, was incorporated by reference into the Original Agreement),[ and, as of the date of this Fee Letter Agreement, the Bank, the City and the Authority hereby agree and acknowledge is
0.30% per annum]. For the period from and after June [9], 2026, the Authority and the City (by payment of Additional Payments) hereby agree to pay or cause to be paid to the Bank the Commitment Fee payable semiannually in arrears from and after June [9], 2026 (as further described in Section 1.2 hereof), equal to (i) the Commitment Fee Rate multiplied by (ii) the Available Commitment, for each day during such semiannual period commencing on the first day of such semiannual period (or, in the case of the first semiannual period of April 1, 2026 through September, 30, 2026, from and after June [9], 2026) and ending on the last calendar day of such semiannual period. As used above, “Commitment Fee Rate” shall mean 0.30%, as subject to increase pursuant to Prior Fee Agreement through June [8], 2026, and, from and after June [9], 2026, shall mean 0.32% per annum, increased one time per level by the percentage points indicated below for each level below the A2/A/A level through or to which the current rating assigned to any long-term, unenhanced obligation of the Revenue Fund by Moody’s Investors Service, Inc., S&P Global Ratings or Fitch Ratings, Inc. falls:
Rating
(Moody’s/S&P/Fitch)
Percentage Point
Increase
A2/A/A or higher 0.00%
A3/A-/A- 0.10%
Baa1/BBB+/BBB+ 0.10%
In the event that (x) the long-term, unenhanced ratings assigned to the Revenue Fund shall be withdrawn or suspended or otherwise unavailable for credit-related reasons or reduced below Baa1 by Moody’s, BBB+ by S&P or BBB+ by Fitch or (y) upon the occurrence of an Event of Default, the then current Commitment Fee Rate based on the table above will be increased by an additional
1.50% per annum. In the event of split ratings, the Commitment Rate will be based on the level that includes the lowest such rating. All such fee increases shall be cumulative.
Section 1.2. Payment Dates. The Commitment Fee shall be paid semiannually in arrears for the preceding semiannual period on the first Business Day of each April and October, commencing on [October 1, 2026] (which such payment shall include the Letter of Credit Fee as calculated pursuant to Section 1.1 hereof), and on the last day of the Bank Purchase Period.
Section 1.3. Other Fees. In addition, the Authority and City (by payment of Additional Payments) shall pay to Bank upon each transfer of the Agreement in accordance with its terms to any successor Trustee, a transfer fee of $2,500 and upon each amendment of the Agreement, this Fee Letter Agreement or any of the other Related Documents, an amendment fee in a minimum amount equal to $5,000 to be determined by the Bank at the time thereof, plus the fees and expenses of counsel to the Bank in connection therewith.
Section 1.4. Calculation of Fees and Interest. All fees payable hereunder shall be nonrefundable and shall be calculated on the basis of a 365/366-day year and actual days elapsed, including the Extension Closing Date and the last day of the Bank Purchase Period. All interest #17..
- 1117 -
4899-3009-3974.5
- 3 -
payable under the Agreement shall be calculated on the basis of a 365/366-day year and actual days elapsed.
Section 1.5. Initial Costs and Expenses. The Authority and the City (by payment of Additional Payments) shall pay to the Bank any and all reasonable fees, charges and expenses, payable or incurred by the Bank (consisting solely of the fees and expenses of counsel to the Bank) in connection with the preparation, due diligence and execution and delivery of the Agreement and the Custodian Agreement, together with interest on such amounts from the date such payment is due until paid at a rate per annum equal to the Default Rate, and agrees to save the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such fees and expenses. The obligations and liabilities under this Section 1.5 shall survive the termination of this Fee Letter Agreement, the Agreement and the Contract and the Authority’s and the City’s obligations hereunder and thereunder and the payment in full of all 2008 Payments and Additional Payments.
Section 1.6. Bank Payment Account. “Bank Payment Account” shall mean the following account of the Bank, or such other account as may be subsequently designated by the Bank in writing to the City, the Authority and the Trustee:
BMO Bank N.A.
Global Trade Operations
13300 Crossroads Parkway North | SC-XRD-2W-G
City of Industry, CA 91746-3417
Tel: 1-(888) 600-8723
Fax: 1-(323) 727-6487
Group email: [email protected]
[ABA #: 121100782
Account Name: Commercial Loan Servicing
Account #: 239855-332
Ref: City of Modesto Water 2008 – Obligor # 1000203410
Attention: Milad Shayouta][UNDER REVIEW]
ARTICLE II. NOTICES.
Any notice, demand, direction, request or other instrument authorized or required by the Agreement to be given to or filed with the Authority, the City, the Remarketing Agent, the Trustee, the Bank or the Bond Insurer, shall be deemed or have been sufficiently given or filed for all purposes, if any, when delivered by hand or when sent by registered mail, return receipt requested, postage prepaid, and if given by telecopy or telegraphic means shall be deemed given when transmitted (receipt confirmed):
If to the Bank:
If with respect to purchases under the Agreement, to:
BMO Bank, N.A.
180 Montgomery Street
San Francisco, California 94104
#17..
- 1118 -
4899-3009-3974.5
- 4 -
Attention: Edward C. Neu, Managing Director
Telephone: (415) 765-4938
Email: [email protected]
with a copy to:
BMO Bank, N.A.
320 S. Canal Street, 16th Floor
Chicago, Illinois 60606
Attention: Millicent Jackson, Vice President
Telephone: (312) 461-5610
Email: [email protected]
If with respect to all other matters, to:
BMO Bank, N.A.
180 Montgomery Street
San Francisco, California 94104
Attention: Edward C. Neu, Managing Director
Telephone: (415) 765-4938
Email: [email protected]
ARTICLE III. MISCELLANEOUS.
Section 3.1. Other Matters. No provision of this Fee Letter Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the parties hereto. No failure or delay on the part of the Bank in exercising any right, power or privilege hereunder and no course of dealing shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies that the Bank would otherwise have. No notice to or demand on the Authority, the City or any other party hereto in any case shall entitle the Authority, the City or such other party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Bank to any other or further action in any circumstances without notice or demand.
Section 3.2. Governing Law. This Fee Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of California.
Section 3.3. Severability. If any provision of this Fee Letter Agreement shall be held or deemed to be or shall in fact be illegal, inoperative or unenforceable the same shall not affect any other provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever.
Section 3.4. Counterparts. This Fee Letter Agreement may be simultaneously executed in several counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. This Fee Letter Agreement may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any #17..
- 1119 -
4899-3009-3974.5
- 5 -
printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.
Section 3.5. One Agreement. This Agreement, the Fee Letter Agreement and any related security or other agreements required by this Agreement, collectively: (a) represent the sum of the understandings and agreements among the Authority, the Bank, the City and the Trustee with respect to the subject matter hereof; (b) replace any prior oral or written agreements between or among the Bank and the Authority, the City and/or the Trustee concerning the subject matter hereof; and (c) are intended by the Authority, the City, the Trustee and the Bank as the final, complete and exclusive statement of the terms agreed to by them with respect to the subject matter hereof. In the event of any conflict between this Fee Letter Agreement and the Agreement and any other Related Documents, this Fee Letter Agreement will prevail. This Fee Letter Agreement and the Agreement shall be construed as one agreement among the City, the Authority, the Trustee and the Bank and shall be governed by the provisions of the Agreement. [The remainder of this page intentionally left blank]
#17..
- 1120 -
4899-3009-3974.5
Signature Page to Fee Letter Agreement
S-1
If the foregoing accurately reflects our agreement, please indicate the same by signing in the space provided below.
Very truly yours,
BMO BANK N.A.
By:
Name: Edward C. Neu
Title: Managing Director
[Signatures continue on the next page]
#17..
- 1121 -
4899-3009-3974.5
Signature Page to Fee Letter Agreement
S-2
Accepted and Agreed to:
CITY OF MODESTO
By:
Name: DeAnna Christensen
Title: Finance Director/Treasurer
Attest:
By:
Name: Diane Navares-Perez
Title: City Clerk
Approved as to Form:
By:
Name: ______________________________
Title: _______________________________
MODESTO PUBLIC FINANCING
AUTHORITY
By:
Name: DeAnna Christensen
Title: Auditor and Treasurer
#17..
- 1122 -
4906-9981-4038.4
AMENDMENT NO. 1 TO
STANDBY CERTIFICATE PURCHASE AGREEMENT
among
BMO BANK N.A.
and
CITY OF MODESTO
and
MODESTO PUBLIC FINANCING AUTHORITY
Dated May [__], 2026
Relating to the
$47,625,000 original aggregate principal amount of
CITY OF MODESTO
WATER REFUNDING REVENUE CERTIFICATES OF PARTICIPATION, 2008 SERIES A Amending that certain Standby Certificate Purchase Agreement, dated as of June 1, 2023, by and among BMO Bank N.A., the City of Modesto and the Modesto Public Financing Authority #17..
- 1123 -
4906-9981-4038.4
AMENDMENT NO. 1 TO
STANDBY CERTIFICATE PURCHASE AGREEMENT
This AMENDMENT NO. 1 TO STANDBY CERTIFICATE PURCHASE AGREEMENT (this “Amendment No. 1”), dated May [__], 2026, by and among BMO BANK N.A., a national banking association (formerly known as BMO Harris Bank N.A., the “Bank”), the MODESTO PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”) and the CITY OF MODESTO, a charter city and municipal corporation duly organized and existing under laws of the State of California (the “City”).
WITNESSETH:
A. The Bank, the Authority and the City executed that certain Standby Certificate Purchase Agreement, dated as of June 1, 2023 (the “Original Standby Certificate Purchase Agreement”), by and among the Bank, the Authority and the City, and the Original Standby Certificate Purchase Agreement has a Stated Expiration Date of June 8, 2026.
B. The City has applied to the Bank for the extension by the Bank of the Stated Expiration Date to [June 8, 2029] and an amendment of certain provisions of the Original Standby Certificate Purchase Agreement and certain provisions of the Original Fee Letter Agreement.
C. The Bank has agreed to extend the Stated Expiration Date to [June 8, 2029] and amend such provisions of the Original Standby Certificate Purchase Agreement and the Original Fee Letter Agreement on the terms and conditions set forth herein.
D. As of May [__], 2026, the Available Principal Commitment is $[________] and the Available Interest Commitment of $[________].
NOW, THEREFORE, in consideration of the foregoing and the undertakings herein set forth and intending to be legally bound, the Authority, the City and the Bank hereby agree as follows:
Section 1. Authority and Definitions.
(a) This Amendment No. 1 is entered into pursuant to Section 8.15 of the Original Standby Certificate Purchase Agreement.
(b) This Amendment No. 1 amends the Original Standby Certificate Purchase Agreement.
(c) Capitalized terms used herein without definition shall have the meanings set forth in the Original Standby Certificate Purchase Agreement. (d) Subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, this Amendment No. 1 and the Amended and Restated Fee Letter Agreement, dated May [__], 2026, by and among the City, the Authority and the Bank (the “Amended and Restated Fee #17..
- 1124 -
4906-9981-4038.4
2 Letter Agreement”), shall be executed and delivered by the Bank, upon the execution and delivery hereof by the Authority, the City and the Bank on May [__], 2026 (the “Extension Closing Date”). (e) The provisions of this Amendment No. 1 shall supersede and prevail over any conflicting provisions of the Original Standby Certificate Purchase Agreement. If there is any conflict between the terms, conditions and provisions of this Amendment No. 1 and those of any of the Related Documents, the terms, conditions and provisions of this Amendment No. 1, as applicable, shall prevail. Save and except as expressly amended hereby, all of the terms and provisions of the Original Standby Certificate Purchase Agreement continue in full force and effect and are applicable to the provisions of this Amendment No. 1 and the obligations of the parties hereunder. Reference to this specific Amendment No. 1 need not be made in any note, document, agreement, letter, certificate, the Standby Certificate Purchase Agreement or any communication issued or made subsequent to, or with respect to, the Standby Certificate Purchase Agreement, it being hereby agreed that any reference to the Standby Certificate Purchase Agreement shall be sufficient to refer to the Original Standby Certificate Purchase Agreement as hereby amended. The parties hereto expressly agree that this Amendment No. 1 shall constitute a modification of the Original Standby Certificate Purchase Agreement and does not constitute a novation or substitution with respect to the Original Standby Certificate Purchase Agreement.
Section 2. Amendment of the Original Standby Certificate Purchase Agreement. (a) All references to the Bank in the Original Standby Certificate Purchase Agreement shall refer to BMO Bank N.A.
(b) The definitions of “Agreement,” “Bank,” “Fee Letter Agreement” and “Stated Expiration Date” in Section 1.01 of the Original Standby Certificate Purchase Agreement are hereby deleted in their entirety and the following substituted therefor:
“Agreement” means this Standby Certificate Purchase Agreement, dated as of June 1, 2023, by and among the Bank, the Authority and the City, as amended by the Amendment No. 1 to Standby Certificate Purchase Agreement, dated May [__], 2026, by and among the Bank, the Authority and the City, and as the same may from time to time be further amended, supplemented or otherwise modified in accordance with its terms.
“Bank” means BMO Bank N.A. and its successors and assigns. “Fee Letter Agreement” means the Amended and Restated Fee Letter Agreement, dated May [__], 2026, by and among the City, the Authority and the Bank, and as the same may be further amended or supplemented from time to time. “Stated Expiration Date” means the later of (a) [June 8, 2029] and (b) the last day of the Extended Bank Purchase Period as extended from time to time pursuant to Section 8.15 hereof or, if any such day is not a Business Day, the next preceding Business Day to such day.
#17..
- 1125 -
4906-9981-4038.4
3 (c) The Revised Agreement is hereby amended by adding the attached “Schedule I – Schedule of Mandatory Payments” thereto after Exhibit A therein and by adding a reference to Schedule I to the Table of Contents thereof.
Section 3. Conditions Precedent to Execution and Delivery and Effectiveness of this Amendment No. 1 and the Amended and Restated Fee Letter Agreement. The obligation of the Bank to execute and deliver this Amendment No. 1 and the Amended and Restated Fee Letter Agreement shall be subject to the fulfillment of the following conditions precedent on or before the Extension Closing Date, in a manner satisfactory to the Bank and its counsel:
(a) the Bank shall have received opinions of the City Attorney, in form and substance satisfactory to the Bank and its counsel dated the Extension Closing Date; (b) the Bank shall have received an opinion of the counsel to the Authority, in form and substance satisfactory to the Bank and its counsel dated the Extension Closing Date; (c) the Bank shall have received on the Extension Closing Date executed originals of this Amendment No. 1 and the Amended and Restated Fee Letter Agreement, and any other documents which the Bank may reasonably request evidencing that all necessary action (including, without limitation, adoption of resolutions) required to be taken by the Authority and the City in connection with the authorization, execution, issuance, delivery and performance of such documents and any other document required to be delivered by the City pursuant to or in connection with this Amendment No. 1 or the Amended and Restated Fee Letter Agreement or the transactions contemplated hereby or thereby, has been taken; (d) the Bank shall have received a certificate signed by an Authorized Representative of the City dated the Extension Closing Date stating that on such date:
(i) the representations and warranties set forth in this Amendment No. 1 and in any other certificate, letter, writing or instrument delivered by the City to the Bank pursuant hereto or in connection herewith, shall be true and correct as of the Extension Closing Date;
(ii) no material adverse change shall have occurred in the condition (financial or otherwise) of the City prior to the Extension Closing Date; (iii) on the Extension Closing Date no Event of Default or no event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default, shall have occurred and be continuing; (iv) there is no lawsuit, tax claim or other dispute pending or threatened against the City which, if lost, would impair the City’s financial condition or ability to repay the unreimbursed Bank Certificates, except as have been disclosed in writing to the Bank;
(v) the City is in compliance with the terms and conditions of Standby Certificate Purchase Agreement and has performed or complied with all of its Obligations, agreements and covenants to be performed or complied with pursuant #17..
- 1126 -
4906-9981-4038.4
4 to the Standby Certificate Purchase Agreement on or prior to the Extension Closing Date; and
(vi) to the extent not already on file with the Bank, the City has delivered to the Bank true, correct and complete copies of the Related Documents and such documents were duly issued, adopted or executed and delivered, have not been modified, amended or rescinded and are in full force and effect on and as of the Extension Closing Date.
(e) the Bank shall have received copies of resolutions of the City Council of the City, certified as of the Extension Closing Date by the City Clerk, authorizing, among other things, the execution, delivery and performance by the City of this Amendment No. 1, the Amended and Restated Fee Letter Agreement and any other documents to be delivered by it hereunder;
(f) the Bank shall have received a certificate of an Authorized Representative of the City dated the Extension Closing Date certifying as to the authority, incumbency and specimen signatures of the Authorized Representative of the City authorized to sign this Amendment No. 1, the Amended and Restated Fee Letter Agreement and any other documents to be delivered by it hereunder and who will be authorized to represent the City in connection with the Standby Certificate Purchase Agreement and the Fee Letter Agreement, upon which the Bank may rely until it receives a new such certificate;
(g) the Bank shall have received a certificate signed by an Authorized Representative of the Authority dated the Extension Closing Date stating that on such date:
(i) the representations and warranties set forth in this Amendment No. 1 and in any other certificate, letter, writing or instrument delivered by the Authority to the Bank pursuant hereto or in connection herewith, shall be true and correct as of the Extension Closing Date;
(ii) no material adverse change shall have occurred in the condition (financial or otherwise) of the Authority prior to the Extension Closing Date; (iii) on the Extension Closing Date no Event of Default or no event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default, shall have occurred and be continuing; (iv) there is no lawsuit, tax claim or other dispute pending or threatened against the Authority which, if lost, would impair the Authority’s financial condition or ability to repay the unreimbursed Bank Certificates, except as have been disclosed in writing to the Bank;
(v) the Authority is in compliance with the terms and conditions of the Standby Certificate Purchase Agreement and has performed or complied with all of its Obligations, agreements and covenants to be performed or complied with pursuant to the Standby Certificate Purchase Agreement on or prior to the Extension Closing Date;
#17..
- 1127 -
4906-9981-4038.4
5 (vi) all information, documents, statements and certificates provided to the Bank are true and correct on and as of the date hereof and were provided in expectation of the Bank’s reliance thereon; and
(vii) the Authority has delivered to the Bank true, correct and complete copies of the Related Documents and such documents were duly issued, adopted or executed and delivered, have not been modified, amended or rescinded and are in full force and effect on and as of the Extension Closing Date; (h) the Bank shall have received copies of resolutions of the governing board of the Authority, certified as of the Extension Closing Date by the secretary of such governing board, authorizing, among other things, execution, delivery and performance by the Authority of this Amendment No. 1, the Amended and Restated Fee Letter Agreement and any documents to be delivered by it hereunder;
(i) the Bank shall have received a certificate of an Authorized Representative of the Authority dated the Extension Closing Date certifying as to the authority, incumbency and specimen signatures of the Authorized Representative of the Authority authorized to sign this Amendment No. 1, the Amended and Restated Fee Letter Agreement and any other documents to be delivered by it hereunder and who will be authorized to represent the Authority in connection with the Standby Certificate Purchase Agreement and the Fee Letter Agreement, upon which the Bank may rely until it receives a new such certificate; (j) the representations and warranties set forth in Section 4 hereof shall be true and correct on and as of the Extension Closing Date and no Event of Default or event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default shall have occurred and be continuing;
(k) payment to the Bank of (or the Bank shall be reasonably satisfied that payment will be made promptly after demand therefor after the Extension Closing Date of) all fees and expenses payable by the City pursuant to Section 5 hereof; and (l) all other legal matters pertaining to the execution and delivery of this Amendment No. 1 and the Amended and Restated Fee Letter shall be reasonably satisfactory to the Bank and its counsel.
Section 4. Representations and Warranties.
(a) The City hereby represents and warrants as of the Extension Closing Date that: (i) the representations and warranties of the City set forth in Article 4.02 of the Original Standby Certificate Purchase Agreement and in any and all documents delivered to the Bank in connection therewith are true and correct on and as of the Extension Closing Date, as if made on and as of such date; (ii) no Event of Default or event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default has occurred and is continuing; (iii) no default has occurred and is continuing under any of the Related Documents; (iv) the City is in compliance with the terms and conditions of the Original Standby Certificate Purchase Agreement and has performed or complied with all of its obligations, agreements and covenants to be performed or complied with pursuant to the Standby Certificate Purchase Agreement on or prior #17..
- 1128 -
4906-9981-4038.4
6 to the Extension Closing Date; (v) no material adverse change in the financial condition, operations or prospects of the City or laws, rules or regulations (or their interpretation or administration) shall have occurred as of the Extension Closing Date that, in any case, may adversely affect the consummation of the transaction, as determined in the sole discretion of the Bank; (vi) this Amendment No. 1 and the Amended and Restated Fee Letter Agreement have each been duly authorized, executed and delivered by the City; and (vii) all information, documents, statements and certificates provided to the Bank by or on behalf of the City in connection with the transactions contemplated by this Amendment No. 1 and the Amended and Restated Fee Letter Agreement are true and correct as of the date thereof and were provided in expectation of the Bank’s reliance thereon in executing this Amendment No. 1 and the Amended and Restated Fee Letter Agreement. (b) The Authority hereby represents and warrants as of the Extension Closing Date that: (i) the representations and warranties of the Authority set forth in Section 4.01 of the Standby Certificate Purchase Agreement and in any and all documents delivered to the Bank in connection therewith are true and correct on and as of the Extension Closing Date, as if made on and as of such date; (ii) no Default or event, act or omission which with notice, lapse of time or both, would constitute such an Event of Default has occurred and is continuing; (iii) no default has occurred and is continuing under any of the Related Documents; (iv) the Authority is in compliance with the terms and conditions of the Standby Certificate Purchase Agreement and has performed or complied with all of its obligations, agreements and covenants to be performed or complied with pursuant to the Standby Certificate Purchase Agreement on or prior to the Extension Closing Date; (v) this Amendment No. 1 and the Amended and Restated Fee Letter Agreement have each been duly authorized, executed and delivered by the Authority; and (vi) all information, documents, statements and certificates provided to the Bank by or on behalf of the Authority in connection with the transactions contemplated by this Amendment No. 1 and the Amended and Restated Fee Letter Agreement are true and correct as of the date thereof and were provided in expectation of the Bank’s reliance thereon in executing this Amendment No. 1 and the Amended and Restated Fee Letter Agreement.
Section 5. Costs and Expenses. The City shall pay (by payment of Additional Payments) to the Bank any and all reasonable fees, charges and expenses, payable or incurred by the Bank in connection with the execution and delivery of this Amendment No. 1, the Amended and Restated Fee Letter Agreement, including without limitation, the fees and expenses of counsel to the Bank including without limitation, the fees and expenses of counsel to the Bank, Nixon Peabody LLP no later than 30 days after the Extension Closing Date pursuant to an invoice of such counsel. The City hereby agrees that such fees, charges and expenses are included as obligations under the Original Standby Certificate Purchase Agreement.
Section 6. Miscellaneous.
(a) No Waiver. The Authority and the City each acknowledge and agree that, if and to the extent that the Bank has not heretofore required strict compliance with the performance by the Authority and the City of the covenants, agreements and obligations of the Authority and the City under the Standby Certificate Purchase Agreement or the Related Documents, such action or inaction shall not constitute a waiver of, or otherwise affect in any manner, the Bank’s rights and remedies under the Standby Certificate Purchase Agreement or the Related Documents, as #17..
- 1129 -
4906-9981-4038.4
7 amended hereby, including the right to require performance of such covenants, agreements and obligations strictly in accordance with the terms and provisions thereof. (b) Counterparts. This Amendment No. 1 may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement. This Amendment No. 1 may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. (c) Severability. Any provision of this Amendment No. 1 which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provisions in any other jurisdiction.
(d) One Agreement. Taken together with the Original Standby Certificate Purchase Agreement and the other instruments and documents delivered in compliance herewith, this Amendment No. 1 and any related security or other agreements required by this Amendment No. 1, collectively: (i) represent the sum of the understandings and agreements among the Authority, the Bank and the City concerning this credit; (ii) replace any prior oral or written agreements between or among the Bank and the Authority and/or the City concerning this credit; and (iii) are intended by the Bank, the Authority and the City as the final, complete and exclusive statement of the terms agreed to by them. In the event of any conflict between this Amendment No. 1 and any other agreements required by this Amendment No. 1, this Amendment No. 1 will prevail.
(e) Governing Law. This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of California. (f) PATRIOT ACT NOTICE. Federal law requires the Bank to provide the following notice. This notice is not part of the foregoing agreement or instrument and may not be altered. Please read the notice carefully.
USA PATRIOT ACT NOTICE. Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan. The Bank will ask for the Authority’s and the City’s legal name, address, tax ID number or social security number and other identifying information. The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of the Authority, the City, guarantors or other related persons.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
#17..
- 1130 -
4906-9981-4038.4
This Amendment No. 1 to Standby Certificate Purchase Agreement is executed as of the date stated on the first page.
BMO BANK N.A.
By:
Name: Edward C. Neu
Title: Managing Director
[Signatures continue on the next page]
#17..
- 1131 -
4906-9981-4038.4
Accepted and Agreed to:
CITY OF MODESTO
By:
Name: DeAnna Christensen
Title: Finance Director/Treasurer
Attest:
By:
Name: Diane Navares-Perez
Title: City Clerk
Approved as to Form:
By:
Name: ______________________________
Title: _______________________________
MODESTO PUBLIC FINANCING
AUTHORITY
By:
Name: DeAnna Christensen
Title: Auditor and Treasurer
#17..
- 1132 -
4906-9981-4038.4
Schedule I-1
SCHEDULE I
SCHEDULE OF MANDATORY PREPAYMENTS
The Bank, the City and the Authority hereby acknowledge and agree that the inclusion of this Schedule I is to provide a schedule of the expected mandatory repayment of the Bonds and the corresponding reduction of the Available Commitment.
Payment Date
Mandatory
Sinking Fund
Payment Due
Principal
Outstanding
Interest
Coverage SCPA
Close $ 42,390,000 $ 487,776 $ 42,877,776
10/1/2023 $ 2,300,000 $ 40,090,000 $ 461,310 $ 40,551,310 10/1/2024 $ 2,410,000 $ 37,680,000 $ 433,579 $ 38,113,579 10/1/2025 $ 2,515,000 $ 35,165,000 $ 404,639 $ 35,569,639 10/1/2026 $ 2,595,000 $ 32,570,000 $ 374,779 $ 32,944,779 10/1/2027 $ 2,705,000 $ 29,865,000 $ 343,653 $ 30,208,653 10/1/2028 $ 2,810,000 $ 27,055,000 $ 311,318 $ 27,366,318 10/1/2029 $ 2,945,000 $ 24,110,000 $ 277,431 $ 24,387,431 10/1/2030 $ 3,055,000 $ 21,055,000 $ 242,277 $ 21,297,277 10/1/2031 $ 3,185,000 $ 17,870,000 $ 205,628 $ 18,075,628 10/1/2032 $ 3,295,000 $ 14,575,000 $ 167,713 $ 14,742,713 10/1/2033 $ 3,430,000 $ 11,145,000 $ 128,244 $ 11,273,244 10/1/2034 $ 3,570,000 $ 7,575,000 $ 87,165 $ 7,662,165
10/1/2035 $ 3,705,000 $ 3,870,000 $ 44,532 $ 3,914,532
10/1/2036 $ 3,870,000 $ - $ - $ -
#17..
- 1133 -
MODESTO PUBLIC FINANCING
AUTHORITY
AGENDA REPORT
DATE OF MEETING:
May 5, 2026
Date: April 28, 2026
TO: Modesto Public Financing Authority Commissioners
THROUGH: Joseph P. Lopez, City of Modesto City Manager and Authority Executive Director
FROM: DeAnna Christensen, City of Modesto Director of Finance and Authority Auditor and Treasurer
SUBJECT: Extension of the Letter of Credit with BMO Bank N.A. Supporting the Lease Revenue Refunding Bonds, Series 2008
CONTACT: DeAnna Christensen, Director of Finance,
[email protected], 209-577-5387
DESCRIPTION:
Consider approving the extension of a Credit Facility with BMO Bank N.A. relating to the Modesto Public Financing Authority Lease Revenue Refunding Bonds Series 2008 (the “2008 Bonds”). (Funding Source: General Fund and Successor Redevelopment Agency)
STRATEGIC PLAN ELEMENT:
This item supports the City of Modesto 2025-2026 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Long-Term Financial Sustainability.
BACKGROUND:
The Modesto Public Financing Authority (the “Authority”) is a joint exercise of powers authority duly organized and existing pursuant to the Joint Exercise of Powers Agreement, dated as of December 5, 1989, by and between the City of Modesto (the “City”) and the Industrial Development Authority of the City of Modesto.
The Authority previously issued its $65,170,000 original aggregate principal amount of 2008 Bonds. Bank of America, N.A., was the initial Credit Facility Provider and issued its Irrevocable Transferable Letter of Credit (LOC) dated August 28, 2008 (the “Initial Credit Facility”) to provide credit support for the 2008 Bonds. On June 13, 2019, the City replaced the Initial Credit Facility with a replacement letter of credit (the “Current Credit #18..
- 1134 -
Modesto Public Financing Authority, May 5, 2026
Extension of the Letter of Credit with BMO Bank National Association (NA) Supporting the Lease Revenue Bonds, Series 2008