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HomeMy WebLinkAboutAgenda Report - August 5, 2015 C-10AGENDA ITEM CITY OF LODI COUNCIL COMMUNICATION TM C401c) AGENDA TITLE: Adopt Resolution to Approve Debt Financing with Farmers and Merchants Bank of Lodi for LED Street Light Retrofit Project in the amount of $1.5 Million and Authorize the City Manager and Deputy City Manager to Execute All Necessary Financing Documents MEETING DATE: August 5, 2015 PREPARED BY: Electric Utility Director RECOMMENDED ACTION: Adopt a resolution to approve debt financing with Farmers and Merchants Bank of Lodi for the LED Street Light Retrofit Project in the amount of $1.5 million and authorize the City Manager and Deputy City Manager to execute all necessary financing documents. BACKGROUND INFORMATION: On March 19, 2014, the City Council approved specifications and authorized advertisement for bids for the LED Street Light Retrofit Project for all of the City's non -LED street lights. Separate bids for both cobra head and post top decorative street lights were requested. The bids included a turn -key procurement, installation, and financing solution. The City received the following two bids on June 5, 2014: Bidder I Cobra Head Post Top t ve Financing Rate Deco Tanko Lighting of $1,275,572 $ 788,404 3.55% San Francisco Aegis ITS Inc. of $1,725,263 $1,837,305 3.55% Anaheim Both firms submitted responsive bids for the cobra head street lights; however Aegis ITS Inc. was the only responsive bid for the post top decorative fixtures. Since Tanko Lighting was the lowest responsive bid, staff is recommending, via.a separate Council Communication, award of a contract for the cobra head retrofit to Tanko Lighting. As for the post top decorative retrofit, the time and material estimate for a Lodi Electric Utility (LEU) crew to perform the work is approximately $670,000. Therefore, staff recommends using internal labor for that portion of the LED retrofit project. To pursue a lower cost of financing and to ensure compliance with the City's Debt Management Policy, an RFP for debt financing of the LED Street Light Retrofit Project was issued on June 22, 2015 with a response deadline of July 7, 2015. Nine responses were received; three of which were deemed non- qualifying. A review of the qualifying proposals in accordance with the City's Debt Management Policy resulted in the selection and recommendation of a seven-year debt financing with Farmers and Merchants Bank at an annual interest rate of 2.3 percent. The proposed term minimizes total interest costs while providing a reasonable period of time to repay the debt without an adverse impact on LEU APPROVED: Manager Adopt Resolution to Approve Debt Financing with Farmers and Merchants Bank of Lodi for LED Street Light Retrofit Project in the amount of $1.5 Million and Authorize the City Manager and Deputy City Manager to Execute All Necessary Financing Documents Page 2 of 2 August 5, 2015 cash reserves. The estimated annual payment of approximately $235,000 will be paid from Greenhouse Gas Free Allowance Proceeds as authorized in the LEU Greenhouse Gas Free Allowance Proceeds Spending Plan approved by the City Council (Resolution 2014-110). Documents in substantially final form are attached. FISCAL IMPACT: Not to exceed $1.5 million, financed over seven years at 2.3 percent with an estimated annual payment of $235,000. Total interest cost over the life of the loan is $154,593. FUNDING AVAILABLE: LEU Capital Account 50199000.77020 Jordan Ayers i Deputy City Manager/Internal Services Director V4 "Z. 7i7is izabeth A. Kirkley Electric Utility Director PREPARED BY: Jules Marchesseault, Engineering and Operations Manager EAK/JLM/lst F&M BANK BUSINESS LOAN APPLICATION Business or City of Lodi Individual's Name: Type of Business: Municipal Government Mailing 221 West Pine Street City: Lodi State: CA Zip Code: Address: 95240 Physical 221 West Pine Street City: Lodi State: CA Zip Code: Address: 95240 Primary Contact Information: Jordan Ayers Phone: (209) 333-6700 Cell: Secondary Contact Information: Phone: Cell: Tax ID #: 94-6000361 Date Established: 1906 Email: jayers@lodi.gov Type of Entity: ❑ Proprietorship ( ❑ Individual -or- ❑ Joint ) ❑ General Partnership ❑ Ltd Partnership ❑ Trust: ( ❑ Individual -or- ❑ Joint ) ❑ C -Corp. ❑ S -Corp ❑ LLC ❑ LLP Company Ownership List all principals, partners, members or managers with 20% or more ownership in the company. Name Title DOB SSN % of Ownership None. City government. �Existing Business Locations Do you ❑ own / ❑ lease the property your business now occupies? Years Remaining on Lease: Total Square Footage: Monthly Lease Payment: $ Do you pay taxes $ per year, maintenance $ year and insurance $ per year in addition to your monthly lease payment? per Name of Insurance Company: Agent's Name: Phone: Address: City: State: Zip Code: Loan Request Purpose $ Amount Finance cost to acquire and install energy Light Emitting Diode light fixtures in streetlights and loan fees. 1,500,000 Total Loan Request: • - 1,500,000 None. Rev 2015-5-20 12tEQUAL Member LENDER` fmbonline.com FDIC F�NI BANK primary Source of Loan Repayment: �miscellaneous Questions Yes No� Has the business, you or any officer of your company ever been involved in bankruptcy or insolvency proceedings? Is the business an endorser, guarantor, or co -maker for obligations not listed in its financial statements? Are any assets pledged or mortgaged other than as stated on business and/or personal financial statements? ❑ Is the business a party to any claims or lawsuits, whether past or present? ❑ Does the business owe any taxes for years prior to the current year? Do any of the proposed guarantors have a trust (revocable or irrevocable)? Please provide an explanation, if you have answered 'yes' to any of the above questions. Authorization to Release Information For additional signatures, use Page 3 of this application By signing below I/We certify that the information provided on and with this form or hereafter by us or on our behalf, is true, correct, and complete and that I/We are authorized to execute this form on behalf of the Applicant/Guarantors. Applicant/Guarantor authorizes F&M Bank ("Bank') to obtain credit reports, and to release credit information to others (including, without limitation, companies affiliated with Bank) regarding Applicant/Guarantor, from time to time. Applicant/Guarantor also authorizes Bank to obtain copies of its tax returns and information from the IRS and taxing authorities, and agrees to execute whatever forms Bank requests to obtain such information Verbal Approval for Applicants only (Guarantor authorization must be in writing.): This certification confirms (employee) obtained verbal permission to pull credit prior to accessing credit information from and for the purpose of determining qualifications for a loan. (employee initial) REQUIRED SIGNER: Corporations — the persons named in the corporate documents. Partnerships — all General partners. Sole Proprietors — the Owner (if married you may apply for a separate account). Limited Liability Company or Limited Liability Partnership — all Members or Manager(s). Trust— all Trustees. PLEASE INCLUDE ALL GUARANTORS. Name of Signer: Title: Signature: Date: Name of Signer: Title: Signature: Date: Name of Signer: Title: Signature: Date: Name of Signer: Title: Signature: Date: Name of Signer: Title: Signature: Date: GUARANTORS For additional guarantors, use Page 3 of this application. Name of Guarantor: Title: Signature: Date: Name of Guarantor: Title: Signature: Date: Name of Guarantor: Title: Signature: Date: Name of Guarantor: Title: Signature: Date: EQUAL Member LENDER` fmbonline.com FDIC FsJ1A BANK Additional Applicants Use this Page if More than 1 Applicant, 5 Applicant Signatures andlor More than 4 Guarantors ore Needed. Business or Individual's Name: Tax ID#: Mailing Address: City: State: Zip Code: Physical Address: City: State: Zip Code: Additional Contact Information: Phone: Fax: Type of Entity: ❑ Proprietorship ( ❑ Individual -or- ❑ Joint) ❑ General Partnership ❑ Ltd Partnership ❑ Trust: ( ❑ Individual -or- ❑ Joint ) ❑ C -Corp. ❑ S -Corp ❑ LLC ❑ LLP �dditlonal Applicant Ownership List all principals• , or more ownership Name Title DOB SSN %of Ownership Name of Signer: Title: Signature: Date: Name of Signer: Title: Signature: Date: Name of Signer: Title: Signature: Date: Name of Signer: Title: Signature: *dditional Guarantor Signatures Date: Name of Guarantor: Title: Signature: Date: Name of Guarantor: Title: Signature: Date: Name of Guarantor: Title: Signature: Date: Name of Guarantor: Title: Signature: Date: Notice: U.S. Federal law requires financial institutions to obtain, verify and record information that identifies each person (individuals or businesses) who opens an account. What this means to you: when you open an account or add any additional service, we will ask you for your name, address, and taxpayer identification number that will allow us to identify you. We may also ask to see other identifying documents. ©2015 Farmers & Merchants Bank of Central California. All rights reserved. 5-7-15 12tEQUAL Member LENDERC fmbonline.com FDIC GOVERNMENTAL CERTIFICATE , t: ,InCi a. i dart.; atlx::. Mattzri oan .Nv... G�11.l.Cali CCO101 r ... fJF2AF References In the boxes above are for Lenders use only and de not limit the applloobtllly of this document to any particular loan or item - Any item above containing ""`"" has been omitted due to text length limitations. Entity: CITY OF LODI Lender: Farmers & Merchants Bank of Central California 221 W. PINE STREET LOAN CENTER LODI, CA 95240 116 WEST PINE STREET P. O. BOX 3000 LODI, CA 95241-1902 (800) 888-1496 WE, THE UNDERSIGNED, DO HEREBY CERTIFY THAT: r THE ENTITY'S EXISTENCE. The complete and correct name of the governmental entity is CITY ("Entity"). The Entity is a governmental entity which Is, and at all times shall be, duly organized, validly existing, and in good st• ,and by virtue of the laws and regulations of the State of California. The Entity has the full power and authority to own its . transact the business and activities in which it is presently engaged or presently proposes to engage. The Entity 71aintain oe PINE STREET, LODI, CA 95240. The Entity shall do all things necessary to preserve and to keep in full force and effeo istence. ind privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of the Entity an other govern quasi governmental authority or court applicable to the Entity and the Entity's business activities. CERTIFICATES ADOPTED. At a meeting of the appropriate governing body of the , y called and held on Augu 6, at which a quorum was presen and voting, y y t n oti orb other dui authorized action in lieu of a mee esolution"et forth in this Gert were adopted, OFFICIALS. The following named persons is an Officials of CITY OF LODI: NAMES TITLES AUTHORIZED STEPHEN SCHWABAUER City Manager Y X JORDAN AYERS Deputy City Manager Y X ACTIONS AUTHORIZED. Any one (1) of the authorized may enter I those agreements will bind the Entity. Specifically, but withpert- (1) of and directed to do the following for and on behalf of the Entit Borrow Money. To borrow, as a cosigner or otherwise, fir Entity and Lender, such sum or sums of money as in their nls of any nature with Lender, and persons Is authorized, empowered, terms as may be agreed upon between the limitation. Execute Notes. To execute and deliver to Lender the promiss` , or oihs ildence of the Entity's credit accommodations, on Lender's forms, at such rates of infers Ctt terms as d upon, evidencing the sums of money so borrowed or any of the Entity's indebtedness to Lend t<' execute a to Lender one or more renewals, extensions, modifications, refinancings, consolidations, ors or more � etas, any portion of the notes, or any other evidence of credit accommodations. E Grant Security. To mortga e, transfer . e, hypolltec lherwtSC encumber and deliver to Lender any property now or hereafter belonging to the in which t or heraa ay have an Interest, including without limitation all of the Entity's real property and all of pe Intangible), as security for the payment of any loans or credit accommodations so obtains I, x �uding any amendments to or modifications, renewals, and extensions of such promissory notes), orof the Entity to Lender at any time owing, however the same may be evidenced. Such &1E ad, pledged, trans erred, endorsed, hypothecated or encumbered at the time such loans are obtained or � Ist any other time or times, end may be either in addition to or in lieu of any property the►®tofar®[rens ...nrsrd, hypothecated or encumbered. Execula aCu execul-r to Lender the forms of mortgage, deed of trust, pledge agreement, hypothecation ogre d other sec Monts aclnq statements which Lender may require and which shall evidence the terms and -*d co rrder and pursue h such encumbrances, or any of them, are given; and also to execute and deliver to Lender a Itten instruments, tel paper, or any other collateral, of any kind or nature, which Lender may deem necessary or proper In with or pertainin a giving of the liens and encumbrances. Notwithstanding the foregoing, any one of the above author s may execute, or record financing statements. Negotiate - o draw, a and discount with Lender all drafts, trade acceptances, promissory notes, or other evidences of In or b to the Entity or in which the Entity may have an interest, and either to receive cash for the same or to cause such pf iced to the Entity's account with Lender, or to cause such other disposition of the proceeds derived therefrom as they sabte. Further Acts. In theNFp lines of credit, to designate additional or alternate individuals as being authorized to request advances under such lines, and in all Qn-. , to do and perform such other acts and things, to pay any and all fees and costs, and to execute and deliver such other documents and agreements as the Officials may in their discretion deem reasonably necessary or proper in order to carry Into effect the provisions of this Certificate. ASSUMED BUSINESS NAMES. The Entity has filed or recorded all documents or filings required by law relating to all assumed business names used by the Entity. Excluding the name of the Entity, the following is a complete list of all assumed business names under which the Entity does business: AssUrnag Business_Name Edb Location LODI PUBLIC FINANCING AUTHORITY LODI PUBLIC IMPROVEMENT CORPORATION I'TS� NOTICES TO LENDER. The Entity will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (A) change in the Entity's name; (B) change In the Entity's assumed business name(s); (C) change in the structure of the Entity; (D) change In the authorized signer(s); (E) change In the Entity's principal office address; (F) change in the Entity's principal residence; or (G) change in any other aspect of the Entity that directly or indirectly relates to any agreements between the GOVERNMENTAL CERTIFICATE Loan No: DRAFT (Continued) Page 2 Entity and Lender. CERTIFICATION CONCERNING OFFICIALS AND CERTIFICATES. The Officials named above is duly elected, appointed, or employed by or for the Entity• as the case may be. and occupy the positions set opposite their respective names. This Certiffcate now stands of record on the books of the Entity, Is in full Force and effect, and has not been modified or revoked in any manner whatsoever. CONTINUING VALIDITY. Any and all acts authorized pursuant to this Certificate and performed prior to the passage of this CertifIcate are hereby ratified and approved. This Cartificate shell be continuing, shall remain in full force and effect and Lender may rely on It until wrltten notice of Its revocation shall have been delivered to and received by Lender at Lendaes address shown above (or such addresses as Lender may designate from time to time). Any such notice shall not affect any of the Entity's agreements or commitments In effect at the time notice is given. IN TESTIMONY WHEREOF, we have hereunto set our hand and attest that the signatures set opposite the nain6: 4{$ ad above Is their genuine signatures.° We each have read all the provisions of this Certificate, and we each personally and on behalf of th entity that all statements and representations made in this Certificate aria true and corrsct. This Govemmental Certificate is dated t 5. NOTE: If the Officials signing this Certificate Is deslgnaled by the foregoing at least one nonaulhorized official of the Entlty. Leee�P�o, Ver 1451000E f:nPr e•II CERTIFIED TO AND City LODI CITY authorized to act it is advisable to have this CertlOcate signed by MIR BUSINESS LOAN AGREEMENT Opo Nd caik'l.Cofl'.:. ..:.• pec p(titt::::::.. References in the boxes above are for Lender's use onlyand do not limit the applicability of this document to any particular loan or Item. Anv Item above containing '" has been omitted due to text length limitations. Borrower: CITY OF LODI Lender: Farmers & Merchants Bank of Central California 221 W. PINE STREET LOAN CENTER LODI, CA 95240 116 WEST PINE STREET P. 0. BOX 3000 LODI, CA 95241-1902 (800) 888-1498 THIS BUSINESS LOAN AGREEMENT dated August 5, 2015, is made and executed between CITY 0%= 9 {" Borrowerl and Farmers & Merchants Bank of Central California ("Lender") on the following terms and conditions. Borrower iia "d prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, Ir 1A which may be described on L any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) I I. Ing, or extending any Loan, Lender Is relying upon Borrower's representations, warranties, and agreements as set forth In t me 3. to granting, renewing, or extending of any Loan by Lender at all times shall be suhjoct to Lender's sole judgment and di n; and j ttith Loans shall be and remain subject to the terms and conditions of this Agreement. Aft - TERM. This Agreement shall be effective as of August 5, 2015, and shall continue in Loans in favor of Lender have been paid in full, including principal, interest, costs, until such time as the parties may agree in writing to terminate this Agreement. CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to mak I. Agreement shall be subject to the fulfillment to Lender's satisfaction of all Documents. Loan Documents. Borrower shall provide to Lender the following do Related Documents as Lender may require for the Loan; all in form and Borrowers Authorization. Borrower shall have provided in rm and substance stiff authorizing the execution and delivery of this Agreement, and the Related IDS such other resolutions, authorizations, documents and In , er or its eouns Payment of Fees and Expenses. Borrower shall have pai as. and as specified in this Agreement or any Related Document. Representations and Warranties. The representations and les so document or certificate delivered to Lender under this Agree iru < No Event of Default. There shajnotAgreement or under any RelatedREPRESENTATIONS AND WARRANTdisbursement of loan proceeds, as C1of time of any and effect until sue ;. all of Borrower's attorneys' fees, and of d charges, or each subsequent Aa6nce under this in this Agreement and in the Related �(1) the Note; (2) together with all such to Lender and Lender's counsel. LLender properly certified resolutions, duly . In addition, Borrower shall have provided which are then due and payable in the Related Documents, and in any would constitute an Event of Default under this and w Lender, as of the date of this Agreement, as of the date of each I%&,,- dificatlon of any Loan, and at all times any Indebtedness exists: Organization. Borrower is ental anti ch Is, and at shall be, duly organized, validly existing, and In good standing under and by virtue of th the Stat Sorrow duty authorized to transact business in all other states in which Borrower is doing busines ', tain menial licenses and approvals for each state in which Borrower Is doing business. Specifically, my qualified as a foreign In all states in which the failure to so qualify would have a material adverse as o ndition. Borrower has the full power and authority to own Its properties and to transact the .business in w resently engage ti or presently proposes to engage. Borrower maintains an office at 221 W. PINE STREET,,,L'. 240. l3 war has designated otherwise in writing, the principal office is the office at which Borrower keeps its lading concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borro n or an -in Borrower's name. Borrower shall do all things necessary to preserve and to keep in full to fled Its rights i ges, and shall comply with all regulations, rules, ordinances, statutes, orders and dec y government govern authorlty or court applicable to Borrower and Borrower's business activities Alf stress Names. Be x as filed or recorded all documents or filings required by law relating to all assumed business names us wor. Excluding Ill of Borrower, the following is a complete iist of ail assumed business names under which Borrower does b x:. Assumed BU5]Re5S Name Filiao LO.G.Z)L4tt Date CITY OF LODI PUBLIC FINANCING AUTHORITY LODI PUBLIC IMPROVEMENT CORPORATION Authorization, Borro, execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all neceissnry action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of any agreement or other Instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties. Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrowar's financial condition as of the date of the statement, and there has been no material adverse change in Borrowers financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed In such financial statements. Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower Is required to give under this Agreerrent when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. Proportion. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or In writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to BUSINESS LOAN AGREEMENT Loan No: DRAFT (Continued) Page 2 all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled In Borrower's legal name, and Borrower has not used or filed a financing statement under any other name for at feast the last five (5) years. Hazardous Substances. 5xcept as disclosed to and acknowledged by Lander in writing. Borrower represents and warrants that: (1) During the period of Borrower's ownership of the Collateral, there has been no use. generation, manufacture, storage, treatment, disposal, release or ihreatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized°user of any of the Collateral shall use, generate, manufacture, stare, treat, dispose of or release any Hazardous Substance on, u q about or from any of the Collateral; and any such activity shall be conducted In compliance with all applicable federal, slate 3. "`.. Cal laws, regulations, and ordinances, Including without Imitation all Environmantal Laws. Borrower authorizes Lender and Its ag• ,�t+s anter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of ;ti :aiatersil with this section of the t"wr uses only and shall not be Agreement_ Any inspections or tests made by Lendor shall be at Borrower's expense and fo, �'siT f p y construed to create any responsibility or liability on the part of Lender to Borrower or to . •..'"rUF The representations and f?. warranties contained herein are based on Borrower's due diligence In investigating the for< Is waste and Hazardous Substances- Borrower hereby (1) releases and waives any future claims against LenRrEdeinlfy, nder6f . trtributlon in She event Borrower becomes liable for cleanup or other casts under any such laws, and (2) aR.01,14h def '; old harmless Lender t • a against any and all claims, losses, liabilities, damages, penalties, and expenses wYrior may directly ori 4y sustain or suffer resulting from a breach of this section of the Agreement or as a consequencese, generation, mane grage, disposal, release or threatened release of a hazardous waste or substance on the Col �a previsions of this sect i- Agreement. Including the obligation to indemnify and defend, shall survive the paym a Indebledness and the termite •�3 expiration or satisfaction of this Agreement and shall not be affected 6y Lender's a1 of any I in any of the Gall at, whether 6y foreclosure or otherwise. �.Q€,. , Litigation and Claims. No litigation, claim, investigation, administrative p� " o, acllan (including these for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred i orially adversely affect Borrower's linancel condition or properties, other than litigation, claims, or other events, If any, th lti disclosed to and acknowledged by Lender in writing. Taxes. To the best of Borrower's knowledge, all of Sorrrtw x returns and rep } i - re or were required to be filed, have been filed, and all taxes, assessments and other govern mentai�,f? en paid In full, e presently being or to be contested by Borrower in good faith in the ordinary course of business �d to reserves I tti 9Yprovided. Lien Priority. Unless otherwise previously disclosed Iq er ha entered into or granted any Security Agreements, or permitted the filing or attachment of any;.- _ ; 'Tily inlet' , i a Ing any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note, that wou011 ; r or s �y be superior to Lender's Security Interests and 9 ri hts in and to such Collateral. �� Binding Effect. This Agreement, the �k Q1 ;Security Agrrsl y), and all Related Documents are binding upon the signers thereof, as well as upon their succ _ a0tatives ander ,s and are legally enforceable in accordance with their respective terms. '" y: , AFFIRMATIVE COVENANTS. aorrot, ) nants a as with Len t't so long as this Agreement remains in effect, Borrower will: ,% y Notices of Claims and Lit[ ',i�romptly int radar {n writing X7'3 all material adverse changes In Borrower's financial condition, and 2 all existing and d nod till a 1 't• a atlo �admin1wrativa roceedin s or similar actions affecting Borrower or (1 lwl 9..� r P 9 9 any Guarantor which couldl efts.Borrower or the financial condition of any Guarantor. a, ��a. Financial Records, Maintain its ids iti^ MR ith GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and ree l& 1l reasonable limas, j C y, `: - l• Financial Stal l s I Lender U ilowing: An ni '_N m'n as a��` In no event later than ane -hundred -eighty (180) days after the and of each fiscal year, sot i�a,once Juco�for the year ended, audited by a certified public accountant satisfactory to Lender, rower to provide L ith written verifications that Borrower is a tax-exempt entity throughout the entire loan term; ti. FE!, 2 *:` . ¢�Ar must file Torr#8 with the IRS by the 15th of the second calender month after the quarter in which the loan is e3) SofAif7salnlejr,;d Rating not lower than the following: af`ci# '2 (b) i 1i #s�s°{7Mf BBB (c) Fiti• 3� Failure to mainl tin all of these minimum ratings will be an event of default; 4) If Borrower fails to maintain a tax-exempt status during the loan term, the Interest Rate will increase to 1.50 times the Pre -Tax Interest Rate. All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being :rico and correct. Additional Information. Furnish such additional information and statements, as Lender may request from time to time. Insurance. Maintain fire and other risk insurance, public liability insurance, and such other Insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with Insurance companies acceptable to Lander. Borrower, upon request a Lender, will deliver to Lander Tram time to time the policies or certificates of Insurance In form satisfaotory to Lender, including stipulations that coverages will not be cancelled or diminished without at least tan (10) days prior written notice to Lender. Each Insurance pall cy also shall include an endorsement prov]ding that coverage In favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection wllh all policies covaring assets In which Lender holds or is offered a security BUSINESS LOAN AGREEMENT Loan No: DRAFT (Continued) Page 3 interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require. Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy stowing such information as Lender may reasonably request, including without limitation the following: (1) the name of the Insurer; (2) the risks insured; (3) the amount of the policy; (A) the properties Insured; (5) the then current property values on the basis of which Insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such pclreomerits. Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations, unless specifically cense.R(66 :ln.. the contrary by Lender in writing. pk'> Taxes, Charges and Liens. Pay and discharge when due all of its Indebtedness and ohiigatlons, inclu�g y�aut limitation all assessments, g 9 taxes, overnmental charges, levies and liens, of every kind and nature, Imposed upon Borrower'. ;`"I parties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, If unpaid, might bete('g barge upon any of Borrower's properties, income, or profits. Provided however, Borrower will not be required to pay and6- assessment, tax, charge, levy, lien or claim so long as (1) the legality of the same shall be contested in good faith bP68 g Wings. and (2) Borrower shall have established on Borrowers books adequate reserves with respect to such cont.ste sassment. Vie, levy, lien, or claim in accordance with GAAP. o; Performance. Perform and comply, In a timely manner, with all terms, conditions, a�&M, . ons set forth in this '' pl, in the Related Documents, and in all other instruments and agreements between Borrower 911 -or. Borrower shall notify a `O1ritedialefy in writing of any default in connection with any agreement. Operations. Maintain executive and management personnel with subs{kffie same ir]tieris and expertanci� as the present executive and management personnel; provide wrIttan notice to Lendero#< fie e�, nd management personnel; conduct its business affairs in a reasonable and prudent manner. Environmental Studies. Promptly conduct and complete, at Borrower's expensFr.'r € -tions, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substa r. waste or by-product of any substance defined as toxic or a hazardous substance under appilcabte federej slate, or local law, r 4 h talion, order or directive, at or affecting any property or any facility owned, leased or used by Borrowers " .. Compliance with Governmental Requirements. Compi r i i6rdlnances, an . us, now or hereafter in effect, of all governmental authorities applicable to the conduct of Bot . r Messes and (ohs, and to the use or occupancy of the Collateral, including without limitation, the Americans it : iii ? itf,may co t in good faith any such law, ordinance, or regulation and withhold compliance during any proceoIuding a so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole q, Len Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, riziy dtory' rider, to protect Lenders interest. Inspection. Permit employees or agars.•('; rtaor at any rew4h a to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to g9;?:s;rz�cii[ norrowoccounts, and records and to make copies and memoranda of Borrower's books, accounts, and rtistiFfl>)�Gver now ore hereafter maintains any records (including without limitation computer generated records ari[i:::atflUter si(hj!yibr programs nvratlon of such records) in the possession of a third party, Borrower, upon request of L9lt6 fia11 nail fy # ;` party to pe ref l or free access to such records at all reasonable times and to provide Lender with coples�1 P�.,,, cords It maj i? �fjasl. all at Barr -expense- Environmental Compliance 'a-;� dap its. Bn ��;�� �� �n: ll ��'spacts with any and all Environmental Laws; not cause or permit to exist, as a result of an inte�t36 &.iwnifi� 3 )5 1 rttC on on Borrower's part or on the part of any third party, on property ;. °Y.::m owned and/or occupied b Bong" >tj�)'roiiirieifiictiyy+here damage may result to the environment, unless such environmental activity is pursuant to and in co a. � .:Wetli the condltlans of a permit Issued by the appropriate federal, state or local gavemmantal d in an event within thirty 30 days after receipt thereof a co of an notice, summons, authorities; shy!# .tt(eTj ,(p Lender pr's) Y Y ( ) Y P copy Y Ilen, cttalio it +;]lye B rk.or othe3l �tlonicalion from any governmental agency or instrumentality concerning any intentional or unlnleniio f E efibrr` is :i s# sil�.ti?stn BorrtSiiF@R: ri In connection with any environmental activity whether or not there is damage to the [twror otnereA%_yr r. vurces. surancos. Niel to and ❑9iil�r to Lender such promissory notes, mortgages, deeds of trust, security agreements, financing statem struments, documents and other agreements as Lender or its attorneys may reasonably request to secure the Loans a erfact all Security Interests. Requtrcid'g� I Items. Borro nowledges the Importance to Lender of the timely delivery of each of the items required by this section (e ulred Fina am" and collectively, the "Required Financial Items"). In the event 6wrower fails to deliver to Lender any of the t Enancf within the lime frame specified herein (each such event, a "Reporting Failure"), in addition to constituting an " {]. ` reundar and without limiting Lenders other rights and remedies with respect to the occurrence of such an Event of Defa ; Feall. pay to Lender the sum of $254.00 per occurrence for each Reporting Failure; provided, however, as it relates solely to the' 191��.}f'21 Reporting Failures in any calendar year, such occurrence shall not be deemed an Event of Default unless Borrower fails to provitlr§ Ixt! Required Financial Items following thirty (30) days notice from Lender. It shall constitute a further Event of Default hereunder If any$uch payment is not received by Lender within thirty (30) days of the data on which such payment is due, and Lender shall be entitled to the exercise of all of its rights and remedies provided hereunder. RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law, rule, regulation or guideline, or the interpretation or application of any thereof by any court or administrative or governmental authority (Includlrng any request or pollcy not having the force of law) shall Impose, modify or make applicable any taxes (except federal, state or local income or franchise taxes Imposed on Lender), reserve requirements, capital adequacy requirements or other obligations which would (A) increase the cost to Lender for extending or maintaining the credit facilities to which this Agreement relates, (B) reduce the amounts payable to Lender under this Agreement or the Related Documents, or (C) reduce the rate of return on Lender's capital as a consequence of Lender's obligations with respect to the credll facilities to which this Agreement relates, then Borrower agrees to pay Lender such additional amounts as will compensate Lender therefor, within rive (5) days after Lender's written demand for such payment, which demand shall be accompanied by an explanation of such imposition or charge and a calculation in reasonable detail of the additional amounts payable by Borrower, which explanation and calculations shall be conclusive in the absence of manifest error. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lenders Interest in the Collateral or If BUSINESS LOAN AGREEMENT Loan No: DRAFT (Continued) Page 4 Borrower falls to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower Is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any actlan that Lender deems appropriate, including but not limited to discharging or paying all taxes, lions, security interests, encumbrances and other Claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender far such purposes will then bear Interest at the rate charged under the Note from the date Incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lenders option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any Installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will he due and payable at the Note's maturity. NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender: Continuity of Operations. (1) Engage in any business activities substantially different than those in wt.11 (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, Collateral out of the ordinary course of business, or (3) make any distribution with respect to any,4f -p. L capital or otherwise. Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any ' lion as the ordinary course of business. ° Agreements. Enter into any agreement containing any provisions which would be obligations under this Agreement or in connection herewith. r CESSATION OF ADVANCES. If Lender has made any commitment to make any other agreement, Lender shall have no obligation to make Loan Advances or to default under the terms of this Agreement or any of the Related Documentsit j Lender, (B) Borrower or any Guarantor dies, becomes incompetent or bewm�$; `. or is adjudged a bankrupt; (C) there occurs a material adverse change in Bo Guarantor, or in the value of any Collateral securing any Loan; or (I7) any Guars revoke such Guarantor's guaranty of the Loan or any other loan with Lender. DEFAULT. Each of the following shall constitute an Event of Def - (,under this Payment Default. Borrower fails to make any payment w Other Defaults. Borrower fails to comply with or to peri'; _ �x or in any of the Related Documents or to comply with 0. r 01 QT agreement between Lender and Borrower. = r Default In Favor of Third Parties. Borrower or any Grantor tisu sales agreement, or any other agreoment, In favor of any o Grantors property or Borrower's or any • tp; abifity tore any of the Related Documents. False Statements. Any warranty,#YeaislfaiA${it atemerri Agreement or the Related Docur£j$tit `is false ar,• +ding In maC(A:Ri :{Ur any false or misleading at any tlr,te��'le ter, R ny. *< Loan, breached by the war is presently engaged, dissolve or transfer or sell 1, whether by reduction of or entity, (2) r other than In of Borrower's wjqojf 4elher under this Agi 'Oihif or under any : (A) Borrower or13i Guarantor is in torrower or any Guarantor has with n In bankruptcy or similar proceedings, oncillion, In the financial condition of any ms or otherwise attempts to limit, modify or condition contained in this Agreement it or condition contained in any other 06Mion of credit, security agreement, purchase or �ersgn ih may materially affect any of Borrower's or any perform their respective obligations under this Agreement or iished to Lender by Borrower or on Borrower's behalf under this respect, either now or at the time made or fumished or becomes Death or Insolvency. The,.;O-a v#t,Borrower, ?�0*.!4 socityjton, 4r terYiit7 atinn of Borrower's existence as a going business, the Insolvency of Borrower, the appointmaw`&,-ri caivpr [} ? • , fi.„..a.� s property, any assignment for the benefit of creditors, any type of creditor workout, or the commO. '# �k .: � i n l t y bankruptcy or insolvency laws by or against Borrower, ar ea>� Defective Collateralization. This int ,.. ”- or any of the Related Documents ceases to be in full force and effect (including failure of any collateral docu,: : •.a�Iq a valid '�Ys�F' acted security interest or lien) at any time and for any reason. Creditor ora off .( `- .wp:d..din s. COMM, of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, reposse tF itx h` p'oth `' orf, by ariy rjtW0".t*.ol Borrower or by any governmental agency against any collateral securing the Loan. -,. This tl y u garnishmeil f 8orroin3 a S6tpcounis. including deposit accounts, with Lender. However, this Event of Default shall Inhere is a good fa'€t) pie by Bearii4or as to the validity or reasonableness of the claim which is the basis of the creditor or ):}ynceeding and If Borr�F#ives Londer written notice of the creditor or forfeiture proceeding and deposits with Lendermonies or �r� for the creditor rit fq���ilure proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reselvdt;�l _ : _ 4:);or the dispute. Events Aft- tor. (k1�jryqi3.the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dig es in.r 'imp.'E3�ent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Cha change occurs In Borrowers financial condition, or Lender believes the prospect of payment or performance of lime # ' }ii16�red- ti Right to Cure. other than a default on Indebtedness, Is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a slmilidr default within the precading tweive (12) montha, it may be cured if Borrower or Grantor, as She case may be, after Lender sends written notice to Borrower or Grantor, as the case may be, demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) it the cure required more then fifteen (15) days, Immediately initiate steps which Lender deems In Lenders sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided In this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement Immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lenders option, all Indebtedness Immediately will became due and payable, all without notice of any kind to Borrower. except that In the case of an Event of Default of the type described in the "Insolvency" subsectlon above, such aoceleratlon shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or avallable at law, In equity, or otherwise. Except as may be prohlblted by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shah not affect Lenders right to declare a default and to exercise Its rights and remedies. BUSINESS LOAN AGREEMENT Loan No: DRAFT (Continued) Page 5 ADDITIONAL EVENT OF DEFAULT. The following shall constitute an Event of Default under this Agreement: Should Borrower, any guarantor, or any grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement in favor of Lander or any other creditor or parson that may materially affect any of Borrower's praporty or Borrower's, any guarantor's, or any grantor's ability to repay the loans or perform their respective obligat{ons under this Agreement or any of the related documents. ARBITRATION, Each party to this agreement, on behalf of Ihemselvas and each of their respective subs:d arses, affiliates, and all of their respective shareholders, directors, officers, employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies between them whether individual, joint, or class in nature, arising from this Agreement or otherwise, Including without limitation contract and tort disputes against any party or any such party's shareholders, directors, officers, employees, agents, representatives, successors and assigns, shall be arbitrated pursuant to the Rules of the American Arbitration Association in effeQF,' the time the claim is flied, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arias :Ijt?gream ant or be prohipited by this arbitration agreement. This Includes, without limitation, obtaining Injunctive relief or a temporary ree�titf}) order; invoking a power of sale tender any deed of trust or mortgage: obtaining a writ of attachment or imposition of a receiver; or le �t,ai.. j# g bny rights relating to personal property, Including taking or disposing of such property with or without judicial process pursuant to A,f;o l� ',. the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act i any right, concerning any Collateral, Including any claim to rescind, reform, or otherwise modify any agreement relatIso be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain any act of any Ali pa that in the event of an action for judicial foreclosure pursuant to California Cade of Civil Procedure Section 726 .or 'siniilar 0, any other state, the commencement of such an action will not constitute a waiver of the right to arbitrate or; ours shall refer t i n as much of such action, including counterclaims, as lawfully may be referred to arbitration. Judgment uppand rendered by eri may be entered >' In any court having jurisdiction. Nothing In this Agreement shall preclude any party.ifti'rts,�se king equitable relief fro t. of competent bjurisdiction. The statute of limitations, estoppel, waiver, laches, and similar doctrinq k� would otherwise be appllC281S '. s cion brought y a party shall be applicable in any arbitration proceeding, and the commt of an a • ' ation proceeding sft'�i a deemed the commencement of an action for these purposes. The Federal Arbitration Act Q.—h1111-2c, ly to tha ccs lion, Interpretation, and enforcement of this arbitration provision. Any such arbitration shall be conducted at a Inad by if alor In San Joaquin County, California, and administered by the American Arbitration Association ("AAA") In accordancf." • . C Y rbitration Act (Title 9, California Code of Civil Procedure Section 1260 at. seq.) and the then existing Commercial Rules of III WAIVER OF JURY TRIAL. To the extent permitted by applicable law, respective subsidiaries, affiliates, and ail or their respective shareltolde assigns, hereby irrevocably waives, to the fullest extent permit%fl'.. . proceeding directly or Indirectly arising out of or relating to it or thereby (whether based on contract, tort or any other thea party's shareholders, directors, officers, employees, agents, and the other parties hereto have been induced to enter into of waivers and certifications in this section. COLLECTION COSTS. Upon default, Lender will have the foliowini Lender may require Borrower to pay, on dema�i ;:zay of its Internal, q incurred because of the default. This in tifi"..mal costs su�1 personnel, accounting personnel or olhe , j- q jtt .a.es, and they Is reasonably incurred as a result of.,.fif tE',tls1?3r Includes s default, including fees to appraiser,;`; lion ageiiA�foraclosure .... due under this paragraph shall be,.[f%1Pp�N�" emand, ¢k ijder may, at bear interest at the Note rate. �: � K MISCELLANEOUS PROVISIONS.NFf 161 each party to IH__ ent, on behalf of themselves and each of their s, directors, office gees, agents, rep rosonto lives. successors and pplicable law, any ri arly may have to a trial by jury in any legal f -orany other loan r the transactions contemplated hereby 3 kzjur 4 st or ccuntercl i hother against any party or any such Wkv. 3 i fprs. and as -.� ach party hereto acknowledges that it erne tsit f n docOhwnts by, among other things, the mutual Ir,, db ! n to aAy.Ci her rights provided In this Agreement or by law. . sts of third parties which Lender reasonably determines were $ , allocable cost of in-house counsel, staff appraisers, collection j,.,• or regular -time compensation of Lender's hourly employees, that ar costs paid to third partles as a result of or on account of the title services and other reasonably incurred amounts. Amounts !s; ' 00. add them to the balance of the Note, in which case they shall a part of this Agreement: Amendments. This AWeemenim' RK oj,`6ny R f l� ents, constitutes the ant understanding and agreamenl of the parties as to the matters sal forth In tihi t. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by, d:�artles so''. `. ,charged or bound by the alteration or amendment, Attorneys' x$i ower a ay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Ler;. '®xa w red In cit with the enforcement of this Agreement. Lender may hire or pay someone else to help onfor. 'grevment, b er shat a costs and expenses of such enforcement. Costs and expenses include Lender's etlpli .fees and legal e>t whether of there is a lawsuit, including attorneys' fees and legal expanses for bankruptcy p fj {including efforts $ or vacate any automatic stay or Injunction], appeals, and any anticipated post judgment collection sarifeii; a: sEfnwer also shall pa J' urt costs and such additional fees as may be directed by the court. >:. Caption �aslk��(s., Caption head., ..... this Agreement are For convenience purposes only and are not to be used to interpret or define the Consent to LtiiT l s > Ipa �i Jyw' PP Srrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation into "1s' f .1 ii to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whalsosi+i3fj'c�vna or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about arijq,. iitatter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Burro 6r additionally valvas any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation Interests. Borrower further waives all rights of offset or counterclaim that It may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan Irrespective of the failure or insolvency of any holder of any interest In the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests Irrespective of any personal claims or defenses that Borrower may have against Lender. Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of California without regard to Its conflicts of law provisions. This Agreement hes been accepted by Lender in the State of California. Choice of Venue. If there Is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of SAN JOAQUIN County, State of California. BUSINESS LOAN AGREEMENT Loan No: DRAFT (Continued) Page 6 No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver Is given In writing and signed by Lender. No delay or omission an the part of Lender In exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provlsion of this Agreement shall not prejudice or constitute a waiver of Lander's right otherwise to demand strict compliance with that provision or any other provision of this Agreemant. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lander and any Grantor, shall constitute a waiver of any of Lender`s rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lander in any instance shall not constitute continuing consent to subsequent instances where such consent Is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Any notice required to he given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimlia [unless otherwise required by law], when deposited with a nationaliy��ecognized overnight courier, or, If mailed, when deposited In the United States mail, as First class, certified or registered mall postage ptdpid�.,dlracted to the addresses shown near the beginning of this Agreement. Any party may change fits address far notices under thisr int by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's addyr '-5- notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provid€r1:. ' equired by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to 41 . Severablllty. If a court of competent jurisdiction finds any provision of this Agreement to s` ?ijl#€fi, ij3lif[I; qr unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unpntor H't� arii:ct(tr: itcumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and a rci _ v. If the off jr rovisiori cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise requin 1, -•Iirw, the it to ii ;or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceabii' ." . j - -1 other provision of�°+ plant, & mx a>-.. Subsidiaries and Affiliates of Borrower. To the extent the context of any prgt!�` t ' 4 this Agreement makes i ip irote, including without IImiistion any representation, warranty or covenant, the word "Borroy��js'?�� ttsed In till ,Agreemenl shall intik, I>of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under, '- ..ft' stances Q3 0jj;;ijhis Agreement be cof trued to require Lender to make any Loan or other financial accommodation to any of $crr�lbsidlarias�`�{(rtes, Successors and Assigns. All covenants and agreements by or on he}t"d unt7i36mad in this Agreement or any Rotated Documents shall bind Borrower's successors and assigns and shall inureio the f€tt7. ;tier and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agri3q{r�ny interest therein, without the prior written aq 1. cs consent of Lender. Survival of Representations and Warranties. Borrower. p representations, warranties, and covenants made by Borrower to Lender under this Agreement or the Relate Lender, all such representations, warranties and coven ,� s> t€ Documents, shall be continuing in nature, and shall remain l in full, or until this Agreement shall be terminated In the mane Time Is of the Essence. Time is of the essence in the perforn M DEFINITIONS. The following capitailzed wor'.. fms shall hav slated to she contrary, all references offl,all mean am,used In the singular shall include the hail include defined in this Agreement shall havegsed to such otherwise defined in this Agreerrerlf4he m . s assigned effect on the date of this AgreeQ46 Advance. The word "Advqd of credit or multiple advance'Ui Agreement. The word "Agrearr from time to time.,koaieitter with Borrower, and assioi and agrees lwrf pking the Loan, Lender is relying on all Agreement or iii ° i -gticste or other instrument delivered by r further zgreftSmas , I . ardless of any investigation made by " ''ig of thef1 and delivery to Lender of the Related Borrower's Indebtedness shall be paid b the last to occur. lig meanings when used in this Agreement. Unless specifically (awful money of the United States of America. Words and terms pular, as the context may require. Words and terms not otherwise i:.Ihe Uniform Commercial Code. Accounting words and terms not i=:'w accordance with generally accepted accounting principles as in rde, or to be made, to Borrower or on Borrower's behalf on a line Agreement. Business LSA -6reomenl, as this Business Loan Agreement may be amended or modified schedules attached to this Business Loan Agreement from time to time. F LODI and includes all co-signers and co -makers signing the Note and all their successors Colla - he word "Coll ' 'r ares all ;,A bwj assets granted as collateral security for a Loan, whether real or personal property, wh nted directly or iY wlielhei.=.r4 anied now or in the future, and whether granted in the form of a security interest, rn liateral mortgage,' .(trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, race ; qulpment trust, j ' al sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment Intended as a sock any other saw lien interest whatsoever, whether created by law, contract, or otherwise. Environmuil The wo; vironmantal Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to Ifi"r• an of„ health or the environment, Including without limitation the Comprehensive Environmental Response, Compensation, - ' I '" 1880, as amended, 42 U.S.C_ Section 9001, at seq. t"CERCLA"j, the Superfund Amendments and Reauthorization A : i3. L. No. 99-488 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 9801, at seq., the Resource Conse!s}i6' Recovery Act, 42 U.S.C. Section 6901, at seq., Chapters 8.5 through 7.7 of Division 20 of the California Health and Sa'ely Codi3•' 91ion 25100, e seq., or other applicable stats or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement. GAAP. The word "GAAP" means generally accepted accounting principles. Grantor. The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, Including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances' mean materials that, because of their quantity, concentration or physical, chemical or Infectious characteristics, may cause or pose a present or potential hazard to human health or the onvirornmont when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous BUSINESS LOAN AGREEMENT Loan No: DRAFT (Continued) Page 7 Substances' are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other Indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents. Lender. The word "Lender" means Farmers & Merchants Bank of Central California, its successors and assigns. Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations d"bed herein or described on any exhibit or schedule attached to this Agreement from time to time, Note. The word "Note" means all of the obligations of Borrower in favor of Lender or to Its order that certain promissory note dated AUGUST 5, 2015 for the original or maximum princlpal arr THOUSAND AND N01100 DOLLARS (51,500,000.00) executed by Borrower and payable 10,1 modifications. amendments, or supplements thereto, together with further sums as Borrower o borrow from Lender when evidenced by another note or other instruments, reciting it is so made by Borrower or any successor-in-ownershlp, and all renewals, extensions, modificaliv Related Documents. The words "Related Documents" mean all promis4ne agreements, guaranties, security agreements, mortgages, deeds of trust agreaments and documents. whether now or hereafter existing, executed Security Agreement. The words "Security Agreement" mean and Inarrangements, understandings or other agreements, whether created by lacreating a Security Interest. Security Interest. The words "Security Interest" mean, without limitatiwhether in the form of a lien, charge, encumbrance, mortgage, deed omortgage, collateral chattel mortgage, chattel trust, factor's lien, equipcontract, lease or consignment intended as a security device, or any ot contract, or otherwise. BORROWER ACKNOWLEDGES HAVING READ ALL THE PR ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED BORROWER: CITV AG 1 Ant 135 LE F/ lay sang promissory notes and MILLION FIVE HUNDRED any renewals, extensions, in ownership hereafter may F Lender or to its order and i6nolements thereof. environmental r instruments. the Loan, at€on any agreements,sa'E, covenants, erw,e, evidencing, governi�''rpres�3+zliny, or "f collateral security, present and future, assignment, pledge, crop pledge, chattel fiiat sale, trust receipt, lien or title retention interest whatsoever whether created by law, BUSINESS VW40BEEMENT AND BORROWER AGREES TO PROMISSORY NOTE - ....:. •:..� , .;:....x.. a $fs�: �tC Sttlrrty l_aa f1::. 8 .:. .::...: . .. t:all.r. r:ull ::��'. tfii"::.:.:..:;. t car ri as'' K�.'--...... ...... �.'.::; ': .r::: .. •.:... ...,•....: ..: ...': ' 'i Cry .. >::�:.�i�:��f t t3'I s � �. {]'! ••,zfl.7_2 ..._... [J RA>' >'^f. ' a . . References in the boxes above are for Lender's use Only and do not limit the applicability of this document to any particular loan or 110-T. Any item above containing """' has been omitted due to text length limitations. Borrower: CITY OF LODI Lender: Farmers $ Merchants Bank of Central California 221 W. PINE STREET LOAN CENTER LODI, CA 95240 116 WEST PINE STREET P. 0. BOX 3000 LODI, CA 9 5241-19 02 (800) 888-1498 Principal Amount: $1,500,000.00 ote: August 5, 2015 PROMISE TO PAY. CITY OF LODI ("Borrower") promises to pay to Farmers 8. Merchants Bank of C fomle ("Lender"), or order, in lawful money of the United States of America, the principal amount of One Million Five Hundred Tho 00 Dollars ($1,500,000.00), together with Interest on the unpaid principal balance from August 5, 2015, until paid in full. PAYMENT. Borrower will pay this Ivan In accordance with the following payment schedule, Ieuf814-it` 4-'-ig,on the unpaid principal balances as described In the "INTEREST CALCULATION METHOD" paragraph using the IntQfi75t ra'; doscriised i[}jktagraph: one interest payment on December 1, 2 01 5, with Interest calculatod on the unpaid principal balances usMW6n interosi rate of 2'.A1#i%;$,;annual consecutive principal and Interest payments of $234,755.01 each, beginning December 1, 2015, vel,;tF•j•r;�,tRrest calculated on the:,O[E1a# 'princlpal balances using an interest rate of 2.300%; and one principal and Interest payment of $234,754 t]'figEy f]ecemt:er 7 , 2022, with ii5t l("sk'qulculaled on the unpaid principal balances using an interest rate of 2.300%. This estimated final p du ds based on the assumption Skrev-Aa-y_�yinonts will be made exactly as scheduled; the actual final payment will be for all principal and,; d Into4b.d t paid, together witF ny other unpaid amounts under this Note. Unless otherwise agreed or required try applicable la 'eta wito the loan as described In the "HOW YOUR PAYMENTS ARE APPLIED" section. Borrower will pay Lender at Lend class shor at such other place as Lender may designate In writing. INTEREST CALCULATION METHOD. Interest on this Note Is computed on a 3G513 It 0 Is, by applying the ratio of the Interest rate over a year of 360 days, multiplied by the outstanding principai balance, wul ipflr tual number of days the principal balance Is outstanding. All interest payable under this Note Is computed u"9 this method. This rnalhod results In a higher effective Interest rate than the numeric Interest rates stated In this Note. PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower ag*1' 4.1-.i� date of the loan and will not be subject to refund upon early p' - by law. In any event, even upon full prepayment of this Nol 1wr $100.00. Other than Borrower's obligation to pay any rriinin amount owed earlier than it Is due. Early payments will not, uncontinue to make payments under the payment schedule. RBorrower's making fewer payments. Borro• .e s not tlanguage. If Borrower sends such a pay ? iay acremain obligated to pay any further ant ar. A other payment instrument that indica.. 7 a Y t constitute conditions or limitations or as full on of a 'P,1ed amount California, LOAN CENTER, 116 Vy( STREET,, ;� BOX 3000, LATE CHARGE. If a paymena $ or whichever is lass. �, , INTERESTAFTERDEFALILT. Upon an additional 4.000 percentage point rl change that would t •mtllp�. ad titer•• Default Rate Mar j'apply I. DEFAULT, Ir ansiliu 01h gIts, Borrower fails anyKiblaled documents c hetwecti1.-L i31e3f.artd Borrower. as and otherpence charges are earned fully as of the or as a iii' default), except as otherwise required )• Lender1 entitled to a minimum Interest charge of 13y pay without penalty all or a portion of the relieve Borrower of Borrower's obligation to ce the principal balance due and may result In ftyments marked "paid in full", "without recourse", or similar )Sinn any of Lender's rights under this Note, and Borrower will ,rrlcatlons concerning disputed amounts, Including any check or nt in full" of the amount owed or that Is tendered with other mailed or delivered to: Farmers & Merchants Bank of Central 95241-1902. ged 5.000% of the regularly scheduled payment or $100.00, Cr 9�1f?*'tb shall, If permilted under applicable law, immediately increase by adding Rate Margin' k. The Default Rate Margin shall also apply to each succeeding interest rate roll. After maturity, or atter this Note would have matured had there been no default, the merest rate described In this Note. t°fit of default ("Event of Default") under this Note: any Flnly i?• nl when due under this Note. with or to perform any other term, obligation, covenant or condition contained in this Note or in with or to perform any term, obligation, covenant or condition contained in any other agreement 4' Default in gf;�f�7ltird par*ie ower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or .. sales agreont '' ;' alit nl. In favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ab i� �perform Borrower's obligations under this Note or any of the related documents. False Statements.r.nty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related d lits is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any ilrri eruafter Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business, the Insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the beneflt of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, Including deposit accounts, with Lender. However, this Event of Default shall not apply if there Is a good faith dispute by Borrower as to the validity or reasonableness of the elolm which Is the basis of the creditor or forfeiture proceeding and If Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, In an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or PROMISSORY NOTE Loan No: DRAFT (Continued) Page 2 disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs in Borrower's financial condition, or lender believes the prospect of payment or performance of this Note is impaired. Cure Provisions. If any default, other than a default in payment is curable and If Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to Borrower demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (16) days. immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note arid. all accrued unpaid interest immediately due, and then Borrower will pay that amount.' ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note If Bc Lender that amount- This includes, subject to any limits under applicable law, Lenders attorneys' fees not there Is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (Including effort, or injunction), and appeals. Borrower also will pay any court costs, in addition to all other sums provi GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the exp � -g the State of California without regard to Its conflicts of law provisions. This Note has been aeeapa y CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to subrg)yglhe jut County, State of California. COLLATERAL. This loan is unsecured. LOAN AGREEMENT. This Note is subject to a Business Loan Agreement dated ofA..' ""'Pib 11e LEAP YEAR. In the event of a leap year, the annual interest rate for this Note tvif3;tlnmputed PARTNERSHIP BORROWER. If Borrower Is a partnership, each of thegeneral't of,j Borrower for Borrower's obligations under this Agreement and the Related docume't� r w in an action related to any thereof directly against the assets of any one or more of B assets of Borrower or any of Borrower's other general partners. PREFERRED RATE REDUCTION. The interest rate on this No as a preferred rate payments being automatically debited from a checking accoyft .$* .Lender as lhas is closed before the loan is paid in full, or (2) there is an ini" checking date of any payment, or (3) you revoke Lender's authority to d a the I of an additional one quarter of one percent (0.25%) for the rem it fiof thdIt '• the spread used in calculating the interest rate. Any minimum 1 rate o � ir;. option, immediately or subsequently may do one or more of the ng.{ t' t Z a payoff by Its original 11nal maturity date, (B) increase Borrower's nto_ or accru ( payments, and (D) continue Borrower's pay I R some amo `izira­ie Borrower's �r isle. ADDITIONAL DEFAULT. The following sf_ gi �efouit unde . ^� _A -W. ,;hot pay. Borrower will pay is legal expenses, whether or My or vacate any automatic stay federal law, the laws of (tri of California. Mhs of SAN JOAQUIN �,1360 day basis. will be jointly and severally liable with enforce any monetary judgment obtained partners without proceeding against the rl bo- The interest rate is based on all loan %tt'rits are due. If (1) your checking account a njty cover the automatic debit on the due ler .."ie will be subject to a one time Increase nteraSl rate loans, the Increase will be applied to 01p Increase by this percentage. Lender, at Its 6.Wer's payments to ensure Borrower's loan will interest, (C) increase the number of Borrower's final payment, Should Borrower, any guarant. graA M. 6fault under an, extension of credit, security agreement, purchase or sales agreement, or any other agreame r of Lend " Ony other cre . pj:, Ourann that may materially affect any of Borrower's property or Borrower's, any guarantor's, or ntor's abll pay the loans;. tfnrn, their respective obligations under this Note or any of the related documents. '`Ih COLLECTION CO -TS. Upon dela' . ' ' t �n addition to any other rights provided in this Note or by law, Lender may require Borrower to pay, on da; ss]3r the costs of third parties which Lender reasonably determines were Incurred because of the default. TH `• t# internal costs sue' i as the allocable cost of in-house counsel, staff appraisers, collection personnel, account�o g:paii(q )y or oilier t i l'etnployees. and the overtime or regular -time compensation of Lender's hourly employees, that is reasonably ineuiyi i ?3K 1 my dof' �fy,.[yrther Includes any fees or costs paid to third parties as a result of or on account of the default, lnclu 9tii oliectio#s: foreclosure services, title services and other reasonably incurred amounts. Amounts s due under thi¢traplm sh�a i T3 . doma�g (i¢er may, at its option, add them to the balance of the Note, in which case they shall . t� bear Iniaro4gi £a Nola rate. HOW Yf i.hFYMENTS ARE APALEE�less otherwise agreed or required by applicable law, payments will be applied first to any interest due; theri`f - al; then to all olhdi C Yges (Including but not limited to late charges, attorney fees, appraisal fees, collection costs, and any other costs as) associated w3farcinq this Note. PAYMENTUP 9 T. If in dv;. "` Pki 'any tlms during the loan, the entire balance of the loan, principal and interest, or any portion thereof, may become due, bta a � rYy7rid by Lender, including any costs or expenses associated with enforcing this Note. The Lender reserves the right to I any order to the extant not prohibited by applicable law. ARBITRATION. Each p ; greemont. on behalf of themselves and each of their respective subsidiaries, affiliates, and all of their respective share holdars, officers, employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies be on 1 0rmn ether Individual, joint, or class in nature, arising from this Agreement or otherwise, Including without limitation contract and tort disputes against any party or any such party's shareholders, directors, officers, employees, agents, representatives. successors and assigns. shall be arbitrated pursuant to the Rules of the American Arbitration Association In effect at the time the claim Is filed, upon request of ail her party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement or he prohibited by this arbitration agreement, This includes, without limitation, obtaining injunctive relief or a temporary restraining order; Invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or Imposition of a receiver; or exercising any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Commercial Coda. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act, or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating to the Collateral, shall also be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain any act of any party. All parties agree that In the event of an action for judicial foreclosure pursuant to California Code of Civil procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims, as lawfully may be referred to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought PROMISSORY NOTE Loan No: DRAFT (Continued) Page 3 by a party shall be applicable in any arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Any such arbitration shall be conducted at a location determined by the arbitrator in San Joaquin County, California, and administered by the American Arbitration Association ("AAA") In accordance with the California Arbitration Act (Title 9, Califomis Code of Civil Procedure Section 1280 at. seq.) and the then existing Commercial Rules of the AAA. WAIVER OF JURY TRIAL. To the extent permitted by applicable law, each party to this agreement, on behalf of themselves and each of their res pact ive subsidlaries, afli€iates, and all of their respective sharehoidars. directors, officers, employees, agents, representalives, successors and assigns, hereby Irrevocably waives, to the fullest extent permitted by applicable law, any right such party may have to a trial by jury in any "at proceeding directly or indirectly arising out of or relating to this agreement or any other loan document or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory), whether by claim or counterclaim4Eap inst any party or any such party's shareholders, directors, officers, employees, agents, representatives, successors and assiveto acknowledges that it and the Other parties hereto have been induced to enter into this agreement and the other loan dog other things, the mutual waivers and certifications in this section, SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS, if any part of this Note cannot be enforced, this fact will not affect enforcing any of its rights or remedies under this Note without losing them. Bflrrower and any, this Note, to the extent allowed by law, waive any applicable statute of limitations, preser! Upon any change in the terms of this Note, and unless otherwise expressly stated In wri fs guarantor, accommodation maker or endorser, shall be relnased from liability. All . (repeatedly and for any length of time) this loan or release any party or guarantor or security Interest in the collateral; and take any other action deemed necessary by the parties also agree that Lender may modify this loan without the consent of or n Yana Is made. The obligations under this Mote are Joint and several. ;< PRIOR TO SIGNING Th TERMS OF THE NOTE. it, 66manrl for pngi(W §party who signs thi u I ties agree that Lor li or impair, fail to realize ut thu.consent of or na may delay or forgo antees or endorses notice of dishonor: ,whether as maker, j•.: ltew or extend �rfect L 9 ' : no. Allll such such ivr the modification DISBURSEMENT REQUEST AND AUTHORIZATION L� to ,,.,,Ma#urs s� .)y Y,,y Coil t Co:l Accr+tr�;Y �� €` af30 00"0... 08'. References in the boxes above are for Lender's use vn{y and do hot 4m It th®a pileability of this document to any particular loan or item. An Item above containing """ "" has been omitted due to text lenglh Ilm}tatfons. Borrower: CITY OF LODI Lender: Farmers 8r Merchants Bank of Central California 221 W. PINE STREET LOAN CENTER LODI, CA 95240 116 WEST PINE STREET P. 0. BOX 3000 LODI, CA 95241-1902 (800) 888.1498 LOAN TYPE. This is a Fixed Rate (2.300% initial rate) Nondisclosable Loan to a Government Entity for 2022. "d, PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for: ❑ Personal, Family, or Household Purposes or Personal Investment. ® Business (Including Real Estate Investment). SPECIFIC PURPOSE. The specific purpose of this loan is: ACQUISITION AND INS. • N OF STREETLIGHTS. DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan pracee isburs loan have been satisfled. Please disburse the loan proceeds of $1,500,000.00 a' Amount paid to Borrower directly: 50.00 $1,496,050.00 Deposited to Checking Account Total Financed Prepaid Finance Char $3,750.00 Loan Fee Mll :":�$200.00 Loan Processing Fee a _. , hm-hM Note Principal: AUTOMATIC PAYMENTS, Borrower t 00-100013-01, the amount of any loan obligated to advance funds to cover the Payments. j�. AUTOMATIC PAYMENT TRANSFERS',ft Sunday, or holiday, the p:1ynii-w..wjl.kil3t ;t amount, the last payment will i� � d a,�. 1 SOCIAL SECURITY NUMBER O Taxpayer Identification Number as FINANCIAL CL INFORMATION FINANCIAL CQ DATED AUGW CITY OF LODI By: LODI are via Managor -00 due on December 1, Y EFFICIENT t_EUt,€,iET'FIKTURES IN of Lenders conditions for making the :es LeridaY. o deduff;-'from Borrower's Checking account, numbered the funds I I are insufficient to cover any payment, Lender shall not be any time an easoi}. Borrower or Lender may voluntarily terminate Automatic automatic W M s from a deposit account and your due date falls on a Saturday, ur deposit a n the prior business day. Due to variations in the last payment r. Sofro ill need to make the final payment, due at maturity, manually. W'13y signing below I hereby certify that the Social Security Number or !ATION, BORROWER REPRESENTS AND WARRANTS TO LENDER THAT THE AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS By: JORDAN AYERS, Deputy City Manager of CITY OF LODI I.nwrP., V., 14,5,10.004 COOP- D.H. URA U,4o,dliaD 1807, 2015 All Rll W R --d -CA RMINCFK NIPi.112D FC TR -2"72 PR.1B CUSTOMER VERIFICATION ..:?rlfiCl cll:.:::....;.;j- ;:..::::f�CCOl1FZ A %:4 References In the boxes above are for Lender's use only and do not limit the applicability of this document to any particular 10an or ilerll. Any item above containing "`""" has been omitted due to text Length limitations. Borrower: CITY OF LODI Lender: Farmers & Merchants Bank of Central California 221 W. PINE STREET LOAN CENTER LODI, CA 95240 116 WEST PINE STREET P. 0. BOX 3000 LODI, CA 952414902 (800) 888-1496 This CUSTOMER VERIFICATION ie attached to and by this reference Is made a part of the Disbursem lust and Authorization, dated August 5, 2015, and executed in connection with a loan or other flnancial accommodations betwee, 1 RS & MERCHANTS BANK OF CENTRAL CALIFORNIA and CITY OF LODI.' To help the government light the funding of terrorism and mons1ng Federal law requires all Financial institutions to obtain, verify, and record information that identifies each person who 0 ra: ccount` A.,, means to you: When you open an account, we will ask for your name, address, date of birth. and other Informal[ hat�Will allow us you, We may also ask to see your driver's license or other identifying documents. �. Borrower/Authorized Signer Full No Physical AdUress . Identification Type;. Identification State of Issuance: Identification Expiration Date:.. . _.- Borrower/Authorized Signer Full Mjrne: Physical Adriross Identification.. - Identification State of Issuance: Identification Expiration Date! I certify that all of the above identification. Verifying Verifying THIS CU! CITY OF LODI By:. LODI Identification Number: Date of Issu Date of [iirlj By: JORDAN AYERS, Deputy City Manager of CITY OF LODI Number: Date: 5, 2015. crifind by me through visual inspection of US government issued 1 Huai P,1 Ver 1C 110 004 Cop;, 0.1t u5A Cprl 111 1199T, 2015 AlRiu01a Re—lo0 , CA P.AINCFIICF4PL C FC T-5472 PR{1A AMORTIZATION SCHEDULE P. Cin.e;lp81 E nen Date Matuiity,-,: If r Can ... Account ' . Officer I#1i13{tfv ...RA i`T " = ,4.,.._.. --� - References in the boxes above are for tender's usa only and dd not limit the applicability of this document to any particular loan or item. Any item above containing ""'" has been omitted due to text ten th Ilmitetions. Borrower: CITY OF LODI Lender. Farmers & Merchants Bank of Central California 221 W. PINE STREET LOAN CENTER LODI, CA 95240 116 WEST PINE STREET P. 0. BOX 3000 LODI, CA 95241-1902 18001888-1498 Disbursement Date: August 5, 2015 ,aguinr Repayment Schedulii i'r4 Interest Rate: 2.300 Calculation Meth ci1:''G51360 Actuarial Payment Payment Payment Interest Ps+ld Remaining Balance Number Date Amount Paid - • 1 12-01-2015 11,308.33 11,308,33 0.00 1,500,000,00 2 12-01-2016 234,755.01 35,075.00 199,680.01 1.300,319,99 3 12-01-2017 234,755.01 30,322,74 204,432.27 1:;[}95,883.72 4 12-01.2018 234,755.01 26,565.49 209,199.52 >�}3.fi,Gt33.20 5 12-01-2019 234,755.01 20,677.013.' ' 254,077.93 ;: i:2;1310.27 6 12-01-2020 12.01-2021 234,766.0115,727 234,755.01 10.5 21$ ', 7.14 1.70 453,583,13 229,405.43 7 8 12-01-2022 234,755.04 5.3401 :;= y 41s4 5.43 0,00 TOTALS: 1.654,693.43 154.593 NOTICE: This Is an estimated loan amortization schedule • Actual amounts may vary f' t+yYin;s are made on different dates or In different amounts. ...... ': - ,nii�ixrt�u Lwrl,,, v„ �1�180W l.e� �•IS VliY�+,,}�..iglf'l: ]l].:,!nghi,�wne C� , IN,, 0— ... RESOLUTION NO. 2015-126 A RESOLUTION OF THE LODI CITY COUNCIL APPROVING DEBT FINANCING WITH FARMERS AND MERCHANTS BANK FOR THE LED STREET LIGHT RETROFIT PROJECT IN THE AMOUNT OF $1.5 MILLION AND AUTHORIZING THE CITY MANAGER AND DEPUTY CITY MANAGER TO EXECUTE ALL NECESSARY FINANCING DOCUMENTS WHEREAS, on March 19, 2014, the City Council approved specifications and authorized advertisement for bids for the LED Street Light Retrofit Project for all of the City's non -LED street lights; and WHEREAS, separate bids for both cobra head and post top decorative street lights were requested, and the bids included a turn -key procurement, installation, and financing solution; and WHEREAS, on June 5, 2014, the City received the following two bids: Bidder Cobra Head Post Top Financing Decorative Rate Tanko Lighting, of $1,275,572 $ 788,404 3.55% San Francisco $1,725,263 Aegis ITS, Inc., of $1,837,305 3.55% Anaheim WHEREAS, both firms submitted responsive bids for the cobra head street lights, however, Aegis ITS, Inc., was the only responsive bid for the post top decorative fixtures; and WHEREAS, since Tanko Lighting was the lowest responsive bid for the cobra head retrofit, staff recommends awarding a contract for the cobra head retrofit to Tanko Lighting; and WHEREAS, since Tanko Lighting's bid for the post top decorative street lights was non-responsive, and since staff has determined this work can be done with in-house labor for a significantly lower cost than the Aegis ITS, Inc., bid, staff is recommending doing the post top decorative street lights in-house; and WHEREAS, to pursue a lower cost of financing and to ensure compliance with the City's Debt Management Policy, an Request for Proposals for debt financing of the LED Street Light Retrofit Project was issued on June 22, 2015, with a response deadline of July 7, 2015; and WHEREAS, nine responses were received; three of which were deemed non -qualifying; and WHEREAS, a review of the qualifying proposals in accordance with the City's Debt Management Policy resulted in the selection and recommendation of a seven-year debt financing with Farmers and Merchants Bank, at an interest rate of 2.3 percent, and the proposed term minimizes total interest costs while providing a reasonable period of time to repay the debt without an adverse impact on Lodi Electric Utility cash reserves; and WHEREAS, the estimated annual payment of approximately $235,000 will be paid from Greenhouse Gas Free Allowance Proceeds, as authorized in the Lodi Electric Utility Greenhouse Gas Free Allowance Proceeds Spending Plan approved by City Council Resolution No. 2014-110. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council hereby approves debt financing with Farmers and Merchants Bank, of Lodi, California, for financing the LED luminaire retrofit of cobra head street lights, in an amount not to exceed $1.5 million; and BE IT FURTHER RESOLVED that the City Council hereby authorizes the City Manager and Deputy City Manager to execute all necessary financing documents. Dated: August 5, 2015 I hereby certify that Resolution No. 2015-126 was passed and adopted by the City Council of the City of Lodi in a regular meeting held August 5, 2015, by the following vote: AYES: COUNCIL MEMBERS — Chandler, Kuehne, Mounce, and Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Mayor Johnson ABSTAIN: COUNCIL MEMBERS — None NNIFE FERRAIOLO City Clerk 2015-126