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HomeMy WebLinkAboutContracts & Agreements_222-2023INDEX TO LEGAL DOCUMENTS PAYMENT SCHEDULE NO. 03 UNDER MASTER EQUIPMENT LEASE -PURCHASE AGREEMENT DATED FEBRUARY 4, 2020 BY AND BETWEEN HOLMAN CAPITAL CORPORATION And CITY OF REDLANDS Lease Documents: PAYMENT SCHEDULE NO. 03 Exhibit A-1— Notice and Acknowledgment of Assignment; Exhibit B-1— Insurance Coverage Request; Exhibit B-2 — Self -Insurance Rider (if applicable); Exhibit C — Essential Use Certificate; Exhibit D — Incumbency Certificate; Exhibit E — Opinion of Lessee's Counsel; Exhibit F — Bank Qualified Certificate Exhibit G — Post Issuance Tax Compliance Procedures; Exhibit H — Escrow Agreement; Exhibit I - Resolution of Lessee; Exhibit J - UCC-1 Financing Statement with attached Schedule A (to be filed by the Investor); Exhibit K - Form 8038-G; and Exhibit L - Closing Memorandum/Payment Proceeds Direction Holman Capital V\ HOLMAN CAPITAL CORPORATION City of Redlands /Hohnan Capital Corporation Payment Schedule No. 03 under Master Equipment Lease -Purchase Agreement PAYMENT SCHEDULE NO. 03 UNDER MASTER EQUIPMENT LEASE -PURCHASE AGREEMENT DATED FEBRUARY 4, 2020 1. DESCRIPTION OF THE EQUIPMENT: Fire apparatus purchased pursuant to that certain Agreement with Fire Apparatus Solutions (the "Vendor") and financed by this Payment Schedule dated November 28, 2023, to that certain Master Equipment Lease -Purchase Agreement dated February 4, 2020 by and between Holman Capital Corporation and City of Redlands including, without limitation, the following: DESCRIPTION Spartan/Smeal Type I Fire Truck Holman Capital Doc Fee $1, 2 21,148.31 3 $3,663,444.93 $ 5, 000.00 TOTAL $3,668,444.93 together with all accessories, attachments, substitutions and accessions. 2. EQUIPMENT LOCATION: 35 Cajon Street, Suite 12, Redlands, CA 92373 3. RENTAL PAYMENT SCHEDULE: The rental payments shall be made for the Equipment as follows: 1 TOTAL RENTAL INTEREST PRINCIPAL PAYMENT NO. DATE PAYMENT DUE COMPONENT COMPONENT CONCLUDING PAYMENT 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Grand Totals 11/28/2023 5/28/2024 11/28/2024 5/28/2025 11/28/2025 5/28/2026 11/28/2026 5/28/2027 11/28/2027 5/28/2028 11/28/2028 5/28/2029 11/28/2029 5/28/2030 11/28/2030 5/28/2031 11/28/2031 5/28/2032 11/28/2032 5/28/2033 11/28/2033 5/28/2034 11/28/2034 5/28/2035 11/28/2035 5/28/2036 11/28/2036 5/28/2037 11/28/2037 5/28/2038 11/28/2038 5/28/2039 11/28/2039 5/28/2040 11/28/2040 5/28/2041 11/28/2041 5/28/2042 11/28/2042 5/28/2043 11/28/2043 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 157,425.45 6, 297, 018.00 108,219.13 $ 49,206.32 106,767.54 $ 50,657.91 105,273.13 $ 52,152.32. 103,734.64 $ 53,690.81 102,150.76 $ 55,274.69 100,520.15 $ 56,905.30 98,841.45 $ 58,584.00 97,113.22 $ 60,312.23 95,334.01 $ 62,091.44 93,502.31 $ 63,923.14 91,616.58 $ 65,808.87 89,675.22 $ 67,750.23 87,676.59 $ 69,748.86 85,618.99 $ 71,806.46 83,500.70 $ 73,924.75 81,319.92 $ 76,105.53 79,074.81 $ 78,350.64 76,763.47 $ 80,661.98 74,383.94 $ 83,041.51 71,934.21 $ 85,491.24 69,412.22 $ 88,013.23 66,815.83 $ 90,609.62 64,142.85 $ 93,282.60 61,391.01 $ 96,034.44 58,558.00 $ 98,867.45 55,641.41 $ 101,784.04 52,638.78 $ 104,786.67 49,547.57 $ 107,877.88 46,365.17 $ 111,060.28 43,088.89 $ 114,336.56 39,715.97 $ 117,709.48 36,243.54 $ 121,181.91 32,668.67 $ 124,756.78 28,988.34 $ 128,437.11 25,199.45 $ 132,226.00 21,298.78 $ 136,126.67 17,283.05 $ 140,142.40 13,148.85 $ 144,276.60 8,892.69 $ 148,532.76 4,511.23 $ 152,914.22 $ 2,628,573.07 $ 3,668,444.93 3,800,200.54 3,747,009.74 3,692,249.80 3,635,874.45 3,577,836.02 3,518,085.46 3,456,572.26 3,393,244.42 3,328,048.41 3,260,929.11 3,191,829.80 3,120,692.05 3,047,455.75 2,972,058.97 2,894,437.98 2,814,527.17 2,732,259.00 2,647,563.92 2,560,370.34 2,470,604.54 2,378,190.64 2,283,050.54 2,185,103.81 2,084,267.65 1,980,456.83 1,873,583.59 1,763,557.58 1,650,285.81 1,533,672.51 1,413,619.13 1,290,024.17 1,162,783.17 1,031,788.55 896,929.58 758,092.28 615,159.28 468,009.76 316,519.33 160,559.93 * Assumes that all rental payments and additional rentals due on and prior to that date have been paid. Rental payments are calculated on the basis of a 360-day year consisting of 12 months of 30 days. 2 4. INTEREST RATE: 5.90% 5. COMMENCEMENT DATE: November 28, 2023 6. SCHEDULED LEASE TERM: 20 Years 7. Lessee's current Fiscal Year extends from July 1, 2023. 8. The terms and provisions of the Master Equipment Lease -Purchase Agreement described above are hereby incorporated into this Payment Schedule by reference and made a part hereof. 9. Lessee hereby consents to the assignment by the Lessor of its rights under this Payment Schedule, which rights are evidenced by the Assignment Agreement entered into concurrently with this Payment Schedule. 10. Lessee hereby represents, warrants, and covenants that (i) its representations, warranties, and covenants set forth in the Master Equipment Lease -Purchase Agreement (particularly Paragraph 21 thereof) are true and correct as though made on the date of execution of this Schedule, and (ii) sufficient funds have been appropriated by Lessee for the payment of all rental payments due under this Payment Schedule during Lessee's current Fiscal Year. 11. Interest, if any, accruing from the Commencement Date hereof to the actual date of funding shall be retained by Lessor as additional consideration for entering into this Schedule. 12. The following exhibits are incorporated into this Payment Schedule by this reference: Exhibit A-1 — Notice and Acknowledgment of Assignment; Exhibit B-1 — Insurance Coverage Request or, as applicable, Exhibit B-2 — Self -Insurance Rider; Exhibit C— Essential Use Certificate; Exhibit D - Incumbency Certificate; Exhibit E — Opinion of Lessee's Counsel; Exhibit F — Bank Qualified Certificate; Exhibit G — Post -Issuance Tax Compliance Procedures; Exhibit H — Escrow Agreement; Exhibit I — Resolution of Lessee; Exhibit J — UCC-1 Financing Statement; Exhibit K — Form 8038-G; and Exhibit L — Closing Memorandum. CITY OF REDLANDS, as Lessee HOLMAN CAPITAL CORPORATION, as Lessor By: Name: Eddie Tejeda By: Name: Lance Holman Title: Mayor °' Title: President & CEO Counterpart No. of two manually executed and serially numbered counterparts. To the extent that this Schedule constitutes chattel paper (as defined in the applicable provisions of the Uniform Commercial Code as enacted in the applicable state), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1. 3 CITY OF REDLANDS, as Lessee HOLMAN CAPITAL CORPORATION, as Lessor By: Name: Eddie Tejeda Lance Holman Title: Mayor : President & CEO Counterpart No. of two manually executed and serially numbered counterparts. To the extent that this Schedule constitutes chattel paper (as defined in the applicable provisions of the Uniform Commercial Code as enacted in the applicable state), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1. 4 EXHIBIT A-1 NOTICE AND ACKNOWLEDGEMENT OF SALE OF RENTAL PAYMENTS AND ASSIGNMENT OF PAYMENT SCHEDULE NO. 03 AND ESCROW AGREEMENT Holman Capital Corporation ("Lessor") and the City of Redlands("Lessee") have entered into a Master Equipment Lease -Purchase Agreement dated February 4, 2020 (the "Master Lease Agreement") and Payment Schedule No. 03 issued thereunder, under which Lessee has, or will have prior to its execution hereof, leased equipment (the "Equipment") described in that Payment Schedule. Lessee is hereby notified that Lessor has assigned its right, title, and interest in and to Payment Schedule No. 03, the leased Equipment, and the rental payments as permitted by Payment Schedule No. 03 in accordance with the Master Lease Agreement. Lessee is hereby directed to pay any and all rental payments and other amounts due under Payment Schedule No. 03 to Mission Valley Bank and/or its affiliates, as Lessor's assignee (the "Assignee"), as directed by the Assignee or a paying agent acting on behalf of Assignee, pursuant to the instructions contained in any invoice or notice. Lessee will also direct any and all correspondence, notice and servicing requests to the Assignee at the following address: Mission Valley Bank Attn: Loan Servicing Department 9116 Sunland Blvd. Sun Valley, CA 91532 By signing this Notice and Acknowledgment, Lessee agrees that it will pay all amounts due under Payment Schedule No. 03 as directed in the invoice without any set-off or deduction whatsoever notwithstanding any defect in, damage to or requisition of any of the Equipment leased under Payment Schedule No. 03, any other similar or dissimilar event, any defense, set-off, counterclaim or recoupment arising out of any claim against Lessor or Assignee. Lessee further acknowledges and agrees that Assignee has not assumed any of Lessor's obligations or duties under the Master Lease Agreement or Payment Schedule No. 03, or made any warranties whatsoever as to the Master Lease Agreement, Payment Schedule No. 03 or the Equipment. Lessee agrees that no change may be made to the Master Lease Agreement or Payment Schedule No. 03 without the prior written consent of Assignee. By signing this Notice and Acknowledgment, Lessee warrants that its representations and warranties under the Lease Agreement are true and correct on the date hereof. Date: November 28, 2023 CITY OF REDL By: Name: Eddie Tejeda Title: Mayor A-1-1 Holman Capital Corporation 25231 Paseo De Alicia Suite 105 Laguna Hills, CA 92653 EXHIBIT B-1 INSURANCE CERTIFICATION [complete only if Lessee is not self -insured] November 28, 2023 Re: Payment Schedule No. 03 under Master Equipment Lease -Purchase Agreement dated February 4, 2020 In connection with the above -referenced Payment Schedule No. 03 and Master Lease Agreement, City of Redlands, as lessee (the "Lessee") certifies that it has instructed the insurance agent named below (please fill in name, address, and telephone number): Name of Agent: Alliant Insurance Services, Inc. Address: 2180 Harvard Street Suite 460 Sacramento, CA 95815 Phone: 916-643-2715 to issue: Liability Insurance. Lessee is required to maintain public liability insurance, personal injury and property damage with policy limits of $3,000,000. The policy should be endorsed to name Mission Valley Bank (the assignee of Holman Capital Corporation) as an additional insured. Casualty Insurance. Lessee is required to maintain all risk extended coverage, malicious mischief and vandalism insurance for the Equipment described in the above -referenced Payment Schedule in an amount not less than the greater of $3,663,444.93 or the full replacement cost of the Equipment. Such insurance shall be endorsed to name Mission Valley Bank as a co -loss payee with respect to such Equipment. The required insurance should also be endorsed to give Mission Valley Bank at least 30 days' prior written notice of the effective date of any material alteration or cancellation of coverage, and an endorsement confirming that the interest of Mission Valley Bank shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee. Proof of insurance coverage will be provided to Mission Valley Bank prior to and/or commensurate with the later of the Commencement Date of Payment Schedule No. 03 or the delivery and acceptance of the Equipment. B-1-1 Very truly yours, CITY OF REDLANDS, as Lessee By: B-1-2 Name: Eddie Tejeda Title: Mayor Holman Capital Corporation 25231 Paseo De Alicia Suite 105 Laguna Hills, CA 92653 EXHIBIT B-2 [complete only if Lessee is self -insured] November 28, 2023 Re: Payment Schedule No. 03 under Master Equipment Lease -Purchase Agreement dated February 4, 2020 In connection with the above -referenced Payment Schedule No. 03, City of Redlands, as lessee (the "Lessee") certifies that it participates in an actuarially sound self-insurance program for property damage and public liability risks. The following is attached (check all that apply): ❑ Letter from risk manager describing self-insurance program Other evidence of Lessee's participation in self-insurance program Very truly yours, CITY OF REDLANDS, as Lease By: ame: Eddie Tejeda Title: Mayor B-2-1 Holman Capital Corporation 25231 Paseo De Alicia Suite 105 Laguna Hills, CA 92653 EXHIBIT C ESSENTIAL USE CERTIFICATE November 28, 2023 Re: Payment Schedule No. 03 under Master Equipment Lease -Purchase Agreement dated February 4, 2020 I, Eddie Tejeda, appointed, or designated representative and Mayor of the City of Redlands, as lessee (the "Lessee"), am qualified to answer the questions set forth below regarding the Equipment to be acquired by Lessee in connection with the above -referenced Payment Schedule: 1. What is the specific use of the Equipment? The specific use of the Equipment is for wildland and urban interface fire suppression. 2. What increased capabilities will the Equipment provide? The Equipment replaces existing two (2) fire apparatus with one additional Fire Truck to add to the fleet. The Fire Trucks have reached the end of their economic useful life. The new units will offer greater fire suppression capacity and enhance firefighter safety. 3. Why is the Equipment essential to your ability to deliver governmental services? The Redlands Fire Department is an all-risk fire agency. The City of Redlands has over 12,000 acres of wildlands, a majority of which have been designated by CalFire as areas of "high fire severity." Thus, the equipment is vital to the mission of the fire department in saving lives and property. 4. Does the Equipment replace existing equipment? (If so, please explain why you are replacing the existing equipment) Yes. The equipment replaces aging fire apparatus that has reached the end of its useful economic life. The new equipment provides additional safety upgrades to the fleet. According to the National Fire Protection Agency (NFPA) Standard 1901, apparatus that have been properly maintained should not remain in frontline service for more than 15 years. Apparatus that are over 20 years should be replaced. 5. Why did you choose this specific Equipment? This unit was chosen based upon the specific needs and mission of the Redlands Fire Department. The unit is based on the United States Forest Service Model 346. 6. For how many years do you expect to utilize the Equipment? Twenty (20) Plus Years - Ten (10) years on the front line and ten (10) years on reserve C-1 Very truly yours, CITY OF REpL'AI?DS, a By: Name: Eddie Tejeda Title: Mayor 2 EXHIBIT D INCUMBENCY CERTIFICATE I, Jeanne Donaldson, do hereby certify that I am the City Clerk of the City of Redlands ("District"), which is a body corporate and politic duly established and validly existing as a political subdivision of the State of California and operates under a Governing Board, and that I have custody of the records of such entity. I hereby certify that, as of the date hereof, the individuals named below are the duly elected or appointed officers of the District holding the offices set forth opposite their respective names. I further certify that: (i) The signatures set opposite their respective names and titles are their true and authentic signatures, and (ii) Such officers have the authority on behalf of such entity to: a. Enter into that certain Payment Schedule No. 03 under Master Equipment Lease - Purchase Agreement dated February 4, 2020 (the "Lease Agreement"), between the City of Redlands and Holman Capital Corporation, as lessor, and that certain Escrow Agreement dated as of November 28, 2023 (the "Escrow Agreement") between the City of Redlands, Holman Capital Corporation, and Mission Valley Bank, as escrow agent; and b. Execute Certificates of Acceptance, Payment Request/Disbursement Request Forms, and any and all other certificate, documents, and agreements relating to the Master Lease Agreement, Payment Schedule No. 03 and Escrow Agreement applicable to that Payment Schedule. NAME Eddie Tejeda TITLE Mayor IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the City of Redlands November 28, 2023 ,a141.2./.. e: Jeanne Donaldson Title: City Clerk D-1 REDLANDS 30o E. State Street, Ste. 690 Redlands, CA 92373 909-798-7510 ygarcia@cityofredlands.org EXHIBIT E OPINION OF LESSEE'S COUNSEL November 21, 2023 Holman Capital Corporation 25231 Paseo De Alicia, Suite 105 Laguna Hills, CA 92653 City of City Attorney Yvette M. Abich Garcia Re: Payment Schedule No. 03 under Master Equipment Lease -Purchase Agreement dated February 4, 2020 Ladies and Gentlemen: As counsel to the City of Redlands (the "Lessee"), I have examined the Master Equipment Lease - Purchase Agreement dated February 4, 2020 and Payment Schedule No. 03, both collectively, the "Lease Agreement"), between the Lessee and Holman Capital Corporation, as lessor ("Lessor"), the form of the Escrow Agreement for Payment Schedule No. 03, together with the Disbursement Request Form and Certificate of Acceptance (collectively, the "Escrow Agreement"), and the proceedings taken by the Governing Body of the Lessee to authorize on behalf of the Lessee the execution and delivery of the Master Lease Agreement, Payment Schedule No. 03 and the Escrow Agreement. The Master Lease Agreement, Payment Schedule No. 03 and the Escrow Agreement are herein collectively referred to as the "Transaction Documents." Based upon the foregoing examination and upon an examination of such other documents and matters of law as I have deemed necessary or appropriate, I am of the opinion that: 1. The Lessee is a political subdivision of the State of California and operates under a Governing Board, and the laws of the State of California with full power and authority to enter into the Transaction Documents. 2. The Transaction Documents have each been duly authorized, executed, and delivered by the Lessee. Assuming due authorization, execution and delivery thereof by Lessor, the Transaction Documents constitute legal, valid, and binding obligations of the Lessee, enforceable against the Lessee in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, moratorium or other laws or equitable principles affecting the enforcement of creditors' rights generally. 3. The Equipment to be leased pursuant to the Lease Agreement constitutes personal property and, when subjected to use by the Lessee, will not be a fixture under applicable law. 4. The Lessee has complied with any applicable public bidding requirements in connection with the Transaction Documents and the transactions contemplated thereby. By proper action, the Governing Body of the Lessee authorized the execution and delivery of the Transaction Documents and certain other matters, which actions were duly taken at a meeting that was held in compliance with all applicable laws relating to the holding of open and public meetings. 5. No litigation or proceeding is pending or, to the best of my knowledge, threatened to restrain or enjoin the execution, delivery, or performance by the Lessee of the Transaction Documents or in any way to contest the validity of the Transaction Documents, to contest or question the creation or existence of the Lessee or the Governing Body of the Lessee or the authority or ability of the Lessee to execute or deliver the Transaction Documents or to comply with or perform its obligations thereunder. There is no litigation pending or, to the best of my knowledge, threatened seeking to restrain or enjoin the Lessee from annually appropriating sufficient funds to pay the rental payments or other amounts contemplated by the Master Lease Agreement and Payment Schedule No. 03. 6. The entering into and performance of the Transaction Documents do not and will not violate any judgment, order, law, or regulation applicable to the Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest, or other encumbrance upon any assets of the Lessee or on the Equipment (as such term is defined in the Lease Agreement) pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement, or other instrument to which the Lessee is a party or by which it or its assets may be bound. Notwithstanding the foregoing, upon the due and timely filing of a UCC-1 and a Title Application and/or Certificate of Title (the latter solely with respect to Equipment constituting titled vehicles), the Lessor will have a perfected security interest in the Equipment. This opinion may be relied upon by Lessor and purchasers and assignees of Lessor's interests in the Lease Agreement. Respectfully submitted, e)p 4iit ill Yvette M. Abich Garcia, City Attorney EXHIBIT F BANK -QUALIFIED DESIGNATION The City of Redlands, as lessee, (the "Lessee") under that certain Master Equipment Lease - Purchase Agreement dated February 4, 2020 and Payment Schedule No. 03 issued thereunder (collectively, the "Lease") to which this Designation is attached, hereby designates the Lease as a "qualified tax-exempt obligation" for the purposes and within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Lessee hereby represents that the Lessee is a "qualified small issuer" in that it reasonably anticipates that the Lessee and other entities that the Lessee controls will not issue tax-exempt obligations (including the Lease) the aggregate principal amount of which exceed $10,000,000 during the calendar year in which the Lease is executed and delivered and interest commences to accrue thereunder; and that the Lease is being entered into and will be used in connection with public purposes. This Designation is attached to and made a part of the Lease and inures to the benefit of the Lessor and its successors and/or assigned. EXECUTED as of this November 28, 2023. CITY OF REDLANDS, as Lessee By: Name: Eddie Tejeda Title: Mayor F-1 EXHIBIT G POST -ISSUANCE TAX COMPLIANCE PROCEDURES Dated: November 28, 2023 The following certificate is delivered in connection with the execution and delivery of Payment Schedule No. 03 issued under the Master Equipment Lease -Purchase Agreement dated February 4, 2020 (the "Master Lease Agreement"), entered into between the City of Redlands (the "Lessee") and Holman Capital Corporation (the "Corporation"). Capitalized terms used herein have the meanings defined in the Lease Agreement. Section 1. In General. 1.1. This Certificate is executed for the purpose of establishing the reasonable expectations of Lessee as to future events regarding the financing of certain equipment (the "Equipment") to be acquired by Lessor and leased to Lessee pursuant to and in accordance with Payment Schedule No. 03 executed under the Master Lease Agreement (together with all related documents executed pursuant thereto and contemporaneously herewith, the "Financing Documents"). As described in the Financing Documents, Lessor shall apply $3,668,444.93 (the "Principal Amount") toward the acquisition of the Equipment and closing costs, and Lessee shall make Rental Payments under the terms and conditions as set forth in the Financing Documents. 1.2. The individual executing this Certificate on behalf of Lessee is an officer of Lessee delegated with the responsibility of reviewing and executing the Financing Documents, pursuant to the governing board's approval or other official action of Lessee adopted with respect to the Financing Documents, a copy of which has been delivered to Lessor. 1.3. The Financing Documents are being entered into for the purpose of providing funds for financing the cost of acquiring, equipping and installing the Equipment which is essential to the governmental functions of Lessee, which Equipment is described in said Payment Schedule No. 03. The Principal Amount will be deposited in escrow by Lessor on the date of issuance of the Financing Documents and held by Mission Valley Bank, as escrow agent (the "Escrow Agent") pending acquisition of the Equipment under the terms of that certain Escrow Agreement for Payment Schedule No. 03 dated as of November 28, 2023 (the "Escrow Agreement"), by and between Lessor, Lessee and Escrow Agent. 1.4. Lessee will timely file for each Payment Schedule issued under the Master Lease Agreement a Form 8038-G (or, if the invoice price of the Equipment under such schedule is less than $100,000, a Form 8038-GC) relating to such Lease with the Internal Revenue Service in accordance with Section 149(e) of the Internal Revenue Code of 1986, as amended (the "Code"). 1.5. The Lease is designated a "qualified tax-exempt obligation" for the purposes and within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. In that regard, the Lessee is a "qualified small issuer" in that it reasonably anticipates that the Lessee and other entities that the Lessee controls will not issue tax-exempt obligations (including the Lease) the aggregate principal amount of which exceed $10,000,000 during the calendar year in which the Lease is executed and delivered and interest commences to accrue thereunder; and that the Lease is being entered into and will be used in connection with public purposes. G-1 Section 2. Non -Arbitrage Certifications. 2.1. The Rental Payments due under the Financing Documents will be made with monies retained in Lessee's general operating fund (or an account or subaccount therein). No sinking, debt service, reserve or similar fund or account will be created or maintained for the payment of the Rental Payments due under the Financing Documents or pledged as security therefor. 2.2. There have been and will be issued no obligations by or on behalf of Lessee that would be deemed to be (i) issued or sold within fifteen (15) days before or after the date of issuance of the Financing Documents, (ii) issued or sold pursuant to a common plan of financing with the Financing Documents and (iii) paid out of substantially the same source of funds as, or deemed to have substantially the same claim to be paid out of substantially the same source of funds as, the Financing Documents. 2.3. Lessee does not and will not have on hand any funds that are or will be restricted, segregated, legally required or otherwise intended to be used, directly or indirectly, as a substitute, replacement or separate source of financing for the Equipment. 2.4. No portion of the Principal Amount is being used by Lessee to acquire investments which produce a yield materially higher than the yield realized by Lessor from Rental Payments received under the Financing Documents. 2.5. The Principal Amount does not exceed the amount necessary for the governmental purpose for which the Financing Documents were entered into. Such funds are expected to be needed and fully expended for payment of the costs of acquiring, equipping and installing the Equipment. 2.6. Lessee does not expect to convey, sublease or otherwise dispose of the Equipment, in whole or in part, at a date which is earlier than the final Payment Date under the Financing Documents. Section 3. Disbursement of Funds; Reimbursement to Lessee. 3.1 It is contemplated that the entire Principal Amount will be used to pay the acquisition cost of Equipment to the vendors or manufacturers thereof or for any financial advisory or closing costs, provided that, if applicable, a portion of the principal amount may be paid to Lessee as reimbursement for acquisition cost payments already made by it so long as the conditions set forth in Section 3.2 below are satisfied. 3.2. Lessee shall not request that it be reimbursed for Equipment acquisition cost payments already made by it unless each of the following conditions have been satisfied: (a) If applicable, Lessee adopted a Resolution or otherwise declared its official intent in accordance with Treasury Regulation § 1.150-2 (a copy of which will be provided to Lessor, if applicable, the "Declaration of Official Intent"), wherein Lessee expressed its intent to be reimbursed from the proceeds of a borrowing for all or a portion of the cost of the Equipment, which expenditure was paid to the Vendor (as defined in the Master Lease Agreement) not earlier than sixty (60) days before Lessee adopted the Declaration of Official Intent; (b) The reimbursement being requested will be made by a written allocation before the later of eighteen (18) months after the expenditure was paid or eighteen (18) months after the items of Equipment to which such payment relates were placed in service; G-2 (c) The entire payment with respect to which reimbursement is being sought is a capital expenditure, being a cost of a type properly chargeable to a capital account under general federal income tax principles; and (d) Lessee will use any reimbursement payment for general operating expenses and not in a manner which could be construed as an artifice or device under Treasury Regulation § 1.148-10 to avoid, in whole or in part, arbitrage yield restrictions or arbitrage rebate requirements. Section 4. Use and Investment of Funds; Temporary Period. 4.1. Lessee has incurred or will incur, within six (6) months from the date of issuance of the Financing Documents, binding obligations to pay an amount equal to at least five percent (5%) of the Principal Amount toward the costs of the Equipment. An obligation is not binding if it is subject to contingencies within Lessee's control. The ordering and acceptance of the items of Equipment will proceed with due diligence to the date of final acceptance of the Equipment. 4.2. An amount equal to at least eighty-five percent (85%) of the Principal Amount will be expended to pay the cost of the Equipment by the end of the three-year period commencing on the date of this Certificate. No portion of the Principal Amount will be used to acquire investments that do not carry out the governmental purpose of the Financing Documents and that have a substantially guaranteed yield of four (4) years or more. 4.3.(a) Lessee covenants and agrees that it will rebate an amount equal to excess earnings on the Principal Amount deposited under the Escrow Agreement to the Internal Revenue Service if required by, and in accordance with, Section 148(f) of the Code, and make the annual determinations and maintain the records required by and otherwise comply with the regulations applicable thereto. Lessee reasonably expects to cause the Equipment to be acquired by November 28, 2026. (b) Lessee will provide evidence to Lessor that the rebate amount has been calculated and paid to the Internal Revenue Service in accordance with Section 148(f) of the Code unless (i) the entire Principal Amount is expended on the Equipment by the date that is the six-month anniversary of the Financing Documents or (ii) the Principal Amount is expended on the Equipment in accordance with the following schedule: At least fifteen percent (15%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Equipment within six months from the date of issuance of the Financing Documents; at least sixty percent (60%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Equipment within 12 months from the date of issuance of the Financing Documents; and one hundred percent (100%) of the Principal Amount and interest earnings thereon will be applied to the cost of the Equipment prior to eighteen (18) months from the date of issuance of the Financing Documents. (c) Lessee hereby covenants that (i) Lessee is a governmental unit with general tax powers; (ii) the Lease is not a "private activity bond" under Section 141 of the Code; (iii) at least ninety-five percent (95%) of the Principal Amount is used for the governmental activities of Lessee; and (iv) the aggregate principal amount of all tax-exempt obligations (including the Lease) issued by Lessee and its subordinate entities, if any, during the current calendar year is not reasonably expected to exceed $10,000,000. Accordingly, the rebate requirements of Section 148(f) of the Code are treated as being met, in lieu of the spending exceptions set forth in paragraph (b) above. G-3 Section 5. Escrow Account. The Financing Documents provide that the monies deposited in escrow shall be invested until payments to the vendor(s) or manufacturer(s) of the Equipment are due. Lessee will ensure that such investment will not result in Lessee's obligations under the Financing Documents being treated as an "arbitrage bond" within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended (the "Code"), respectively. Any monies which are earned from the investment of these funds shall be labeled as interest earned. All such monies will be disbursed on or promptly after the date that Lessee accepts the Equipment. Lessee acknowledges that the provisions of Sections 2 and 4 herein are particularly applicable when the Principal Amount is funded into an Escrow Fund subject to the Escrow Agreement. Section 6. No Private Use; No Consumer Loan. 6.1. Lessee will not exceed the private use restrictions set forth in Section 141 of the Code. Specifically, Lessee will not permit more than 10% of the Principal Amount to be used for a Private Business Use (as defined herein) if, in addition, the payment of more than ten percent (10%) of the Principal Amount plus interest earned thereon is, directly or indirectly, secured by (i) any interest in property used or to be used for a Private Business Use or (ii) any interest in payments in respect of such property or derived from any payment in respect of property or borrowed money used or to be used for a Private Business Use. 6.2 In addition, if both (A) more than five percent (5%) of the Principal Amount is used as described above with respect to Private Business Use and (B) more than five percent (5%) of the Principal Amount plus interest earned thereon is secured by Private Business Use property or payments as described above, then the excess over such five percent (5%) (the "Excess Private Use Portion") will be used for a Private Business Use related to the governmental use of the Equipment. Any such Excess Private Use Portion of the Principal Amount will not exceed the portion of the Principal Amount used for the governmental use of the particular project to which such Excess Private Use Portion is related. For purposes of this paragraph 6.2, "Private Business Use" means use of bond proceeds or bond financed -property directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a state or local governmental unit and excluding use as a member of the general public. 6.3. No part of the Principal Amount or interest earned thereon will be used, directly or indirectly, to make or finance any loans to non -governmental entities or to any governmental agencies other than Lessee. Section 7. No Federal Guarantee. 7.1. Payment of the principal or interest due under the Financing Documents is not directly or indirectly guaranteed, in whole or in part, by the United States or an agency or instrumentality thereof. 7.2. No portion of the Principal Amount or interest earned thereon shall be (i) used in making loans the payment of principal or interest of which are to be guaranteed, in whole or in part, by the United States or any agency or instrumentality thereof, or (ii) invested, directly or indirectly, in federally insured deposits or accounts if such investment would cause the financing under the Financing Documents to be "federally guaranteed" within the meaning of Section 149(b) of the Code. G-4 Section 8. Miscellaneous. 8.1. Lessee shall keep a complete and accurate record of all owners or assignees of the Financing Documents in form and substance satisfactory to comply with the registration requirements of Section 149(a) of the Code unless Lessor or its assignee agrees to act as Lessee's agent for such purpose. 8.2. Lessee shall maintain complete and accurate records establishing the expenditure of the Principal Amount and interest earnings thereon for a period of five (5) years after payment in full under the Financing Documents. 8.3. To the best of the undersigned's knowledge, information and belief, the above expectations are reasonable and there are no other facts, estimates or circumstances that would materially change the expectations expressed herein. 8.4. The Lessee's Tax Identification Number is: 95-6000766. IN WITNESS WHEREOF, this Post -Issuance Tax Compliance Procedures Certificate has been executed on behalf of Lessee as of November 28, 2023. CITY OF REDLANDS, as Lessee By: G-5 Name: Eddie Tejeda Title: Mayor EXHIBIT H ESCROW AGREEMENT LESSOR: ESCROW AGENT: Holman Capital Corporation Mission Valley Bank 25231 Paseo De Alicia, Suite 105 9116 Sunland Blvd. Laguna Hills, CA 92653 Sun Valley, CA 91532 LESSEE: City of Redlands 35 Cajon Street Suite 30 Redlands, CA 92373 THIS ESCROW AGREEMENT (this "Escrow Agreement") is made as of November 28, 2023, between Holman Capital Corporation ("Lessor"), the City of Redlands ("Lessee"), and Mission Valley Bank (the "Escrow Agent"). Lessor and Lessee have heretofore entered into that certain Payment Schedule No. 03 (the "Payment Schedule") under that Master Equipment Lease -Purchase Agreement dated February4, 2020 (the "Master Lease Agreement"). The Payment Schedule and Master Lease Agreement are jointly referred to herein as the "Lease." The Lease contemplates that certain Equipment described therein (the "Equipment") is to be acquired from the vendor(s) or manufacturer(s) thereof. After acceptance of the Equipment by Lessee, the Equipment is to be leased by Lessor to Lessee pursuant to the terms of the Lease. The Lease contemplates that Lessor will deposit with the Escrow Agent cash in the amount of $3,668,444.93 (the "Deposit Amount"), for deposit into the escrow fund (the "Escrow Fund"), to be held in escrow by the Escrow Agent and applied on the express terms and conditions set forth herein. Such deposit into the Escrow Fund, together with all interest and additions received with respect thereto, is to be applied from time to time to pay the vendor(s) or manufacturer(s) of the Equipment its invoice cost (a portion of which may, if required, be paid prior to final acceptance of the Equipment by Lessee). The Escrow Fund is to be held for the account and benefit of Lessee, and Lessee has granted to Lessor a first priority and perfected lien on and security interest in the Escrow Fund and any all proceeds, interest and other earnings thereon and investments therein to the Lessor by virtue of the execution of this Escrow Agreement and the Lease without the need for anyadditional filings or financing statements. The parties desire to set forth the terms on which the escrow is to be created and to establish the rights and responsibilities of the parties hereto. NOW, THEREFORE, the parties agree as follows: 1. The Escrow Agent hereby agrees to serve as escrow agent upon the terms and conditions set forth herein. The Escrow Agent agrees that the Escrow Fund shall be held irrevocably in trust for the account and benefit of Lessee and all interest earned with respect to the Escrow Fund shall accrue to the benefit of Lessee and shall be applied as expressly set forth herein. H-1 To the limited extent required to perfect the first, priority security interest granted by Lessee to Lessor in the cash and negotiable instruments from time to time held in the Escrow Fund, Lessor hereby appoints the Escrow Agent as its security agent, and the Escrow Agent hereby accepts the appointment as security agent, and agrees to hold physical possession of such cash and negotiable instruments on behalf of Lessor. 2. On such day as determined to the mutual satisfaction of the parties pursuant to the terms of the Payment Schedule (the "Commencement Date"), Lessor shall deposit with the Escrow Agent cash in the amount of the Deposit Amount to be held by the Escrow Agent on the express terms and conditions set forth herein. The Escrow Agent agrees to accept the deposit of the Deposit Amount by Lessor with the Escrow Agent, and further agrees to hold the amount so deposited together with all interest and other additions received with respect thereto in escrow on the express terms and conditions set forth herein. 3. The Escrow Agent shall at all times segregate the Escrow Fund into an account maintained for that express purpose, which shall be clearly identified on the books and records of the Escrow Agent as being held in its capacity as Escrow Agent. Securities and other negotiable instruments held in the Escrow Fund from time to time shall be held or registered in the name of the Escrow Agent (or its nominee). The Escrow Fund shall not, to the extent permitted by applicable law, be subject to levy or attachment or lien by or for the benefit of any creditor of any of the parties hereto (except with respect to the security interest therein held by Lessor). 4. Lessee hereby directs the Escrow Agent to invest the cash held in the Escrow Fund from time to time in a Mission Valley Bank non -interest bearing demand deposit account with no fees or costs or, in the event such fund is not at the time available, such other investments as Lessee may specify in writing, to the extent the same are at the time legal for investment of the funds being invested. Interest or other amounts earned and received by the Escrow Agent with respect to the Escrow Fund shall be deposited in and become a part of the Escrow Fund. No investment shall be made that would cause the Lease to be deemed to be an arbitrage bond within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended. 5. Lessor and Lessee hereby authorize the Escrow Agent to take the following actions with respect to the Escrow Fund: a. From time to time, the Escrow Agent shall pay the vendor or manufacturer of the Equipment payments then due and payable, or reimburse Lessee for amounts that it has paid to the vendor or manufacturer of the Equipment, upon receipt of the following: (a) a duly executed Certificate of Acceptance and Payment Request in the form attached as Exhibit A hereto, (b) the vendor(s) or manufacturer(s) invoice(s) specifying the acquisition price of the Equipment described in the requisition request, and (c) any additional documentation required by Lessor. b. If Lessor provides to the Escrow Agent written notice of the occurrence of an Event of Default or an Event of Nonappropriation by Lessee under the Master Lease Agreement or Payment Schedule, the Escrow Agent shall thereupon promptly remit to Lessor the entire balance of the Escrow Fund. c. Upon receipt by the Escrow Agent of a duly executed Certificate of Acceptance and Payment Request identified as the final such request, the Escrow Agent shall transfer the then remaining balance of the Escrow Fund to Lessee, upon the express condition that Lessee hereby agrees to use such excess H-2 amount solely for capital expenditures as shall be approved by Lessee or, at the written direction of Lessee, for application against the interest component of the Lessee's payment obligation under the Lease, as provided therein, unless otherwise agreed by Lessor. 6. The Escrow Agent shall have no liability for acting upon any written instruction presented by Lessee and Lessor in connection with this Escrow Agreement that the Escrow Agent in good faith believes to be genuine. Furthermore, the Escrow Agent shall not be liable for any act or omission in connection with this Escrow Agreement except for its own gross negligence, willful misconduct, or bad faith. The Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Fund as a result of the investments made pursuant to Section 4. 7. To the extent authorized by law, Lessee hereby agrees to indemnify and save the Escrow Agent harmless against any liabilities that it may incur in the exercise and performance of its powers and duties hereunder and that are not due to the Escrow Agent's gross negligence or willful misconduct. No indemnification will be made under this Section or elsewhere in this Escrow Agreement for damages arising solely out of gross negligence, willful misconduct, or bad faith by the Escrow Agent, its officers, agents, employees, successors or assigns. 8. The Escrow Agent may at any time resign by giving at least 30 days' prior written notice to Lessee and Lessor, but such resignation shall not take effect until the appointment of the successor Escrow Agent. The substitution of another bank or trust company to act as Escrow Agent under this Escrow Agreement may occur by written agreement of Lessor and Lessee. In addition, the Escrow Agent may be removed at any time, with or without cause, by instrument in writing executed by Lessor and Lessee. Such notice shall set forth the effective date of the removal. In the event of any resignation or removal of the Escrow Agent, a successor Escrow Agent shall be appointed by an instrument in writing executed by Lessor and Lessee. Such successor Escrow Agent shall indicate its acceptance of such appointment by an instrument in writing delivered to Lessor, Lessee and the predecessor Escrow Agent. Upon the effective date of resignation or removal, the Escrow Agent will transfer the Escrow Fund then held by it to the successor Escrow Agent selected by Lessor and Lessee. 9. This Escrow Agreement shall terminate upon receipt by the Escrow Agent of the written notice from Lessor specified in Section 5(b) or Section 5(c) hereof. 10. All notices hereunder shall be in writing, sent by certified mail, return receipt requested, or by mutually recognized overnight carrier addressed to the other party at its respective address shown on page 1 of this Escrow Agreement or at such other address as such party shall from time to time designate in writing to the other parties; and shall be effective on the date or receipt. 11. This Escrow Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. No rights or obligations of the Escrow Agent under this Escrow Agreement may be assigned without the prior written consent of Lessor and Lessee. 12. This Escrow Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no waiver, consent, modification, or change of terms hereof shall bind any party unless in writing signed by all parties. H-3 13. The Escrow Agent may employ agents, attorneys and accountants in connection with its duties hereunder and shall not be liable for any action taken or omitted in good faith in accordance with the advice of counsel, accountants, or other skilled persons. 14. This Escrow Agreement shall be governed by and be construed and interpreted in accordance with the internal laws of the State of California. [Remainder of page intentionally left blank] H-4 IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth. LESSOR: HOLMAN CAPITAL CORPORATION LESSEE: CITY OF REDLAN By: By: Name: Lance Holman Name: Eddie Tejeda Title: President & CEO Title: Mayor ESCROW AGENT: By: Name: Paula Bahamon Title: Vice President Community Development Manager H-5 IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth. : HOLMAN CAPITAL CORPORATION LESSEE: CITY OF REDLANDS f dance Holman Ie: President & CEO ESCROW AGENT: By: By: Name: Eddie Tejeda Title: Mayor Name: Paula Bahamon Title: Vice President Community Development Manager H-5 IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth. LESSOR: HOLMAN CAPITAL CORPORATION LESSEE: CITY OF REDLANDS By: By: Name: Lance Holman Name: Eddie TeJeda Title: President & CEO Title: Mayor ESCROW AGENT: By: CQl) / arniOn Title: Vice President Community Development Manager H-s EXHIBIT A To ESCROW AGREEMENT CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST The following payment request is directed to Mission Valley Bank (the "Escrow Agent"), as escrow agent under that certain Escrow Agreement dated November 28, 2023 (the "Escrow Agreement"), between the City of Redlands ("Lessee"), Holman Capital Corporation ("Lessor"), and the Escrow Agent. Because Holman Capital Corporation has assigned all of its right, title, and interest in and to the Escrow Agreement to Mission Valley Bank, all references herein to "Lessor" shall mean Mission Valley Bank. The Escrow Agent is hereby requested to pay from the Escrow Fund established and maintained under the Escrow Agreement the amount set forth below to the named payee(s). The amount shown is due and payable under a purchase order or contract (or has been paid by and not previously reimbursed to Lessee). The equipment described below is part or all of the Equipment leased pursuant to that certain Payment Schedule No. 03 (the "Payment Schedule") executed pursuant to the Master Equipment Lease - Purchase Agreement dated February 4, 2020 (the "Master Lease Agreement"), between Lessor and Lessee: DESCRIPTION OF QUANTITY UNITS OF EQUIPMENT AMOUNT PAYEE Lessee hereby certifies and represents to and agrees with Lessor as follows with respect to the Equipment described above: (i) the Equipment has been delivered to the location(s) set forth in the Payment Schedule; (ii) a present need exists for the Equipment, which need is not temporary or expected to diminish in the near future; (iii) the Equipment is essential to and will be used by Lessee only for the purpose of performing one or more governmental functions of Lessee consistent with the permissible scope of Lessee's authority; (iv) the estimated useful life of the Equipment based upon the manufacturer's representations and Lessee's projected needs is not less than the term of the Payment Schedule; (v) Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes as of the date of this Certificate; (vi) the Equipment is covered by insurance in the types and amounts required by the Master Lease Agreement; (vii) no Event of Default or Event of Nonappropriation, as those terms are defined in the Master Lease Agreement, and no event that with the giving of notice or lapse of time or both, would become an Event of Default or an Event of Nonappropriation, has occurred and is continuing on the date hereof; and (viii) sufficient funds have been appropriated by Lessee for the payment of all rental payments due under the Payment Schedule during Lessee's current Fiscal Year. Based on the foregoing, the Escrow Agent is hereby authorized and directed to fund the acquisition of the Equipment set forth above by paying, or causing to be paid, the manufacturer(s)/vendor(s) the amounts set forth on the attached invoices from the Escrow Fund held under the Escrow Agreement in accordance with its terms. The following documents are attached hereto and made a part hereof: (a) Original Invoice(s) and (b) Copies of Certificate(s) of Ownership, designating Lessor as legal owner, and evidence of filing. [Remainder of page intentionally left blank] H-6 IF REQUEST IS FINAL REQUEST, CHECK HERE ❑. The undersigned hereby certifies that the items of Equipment described above, together with the items of Equipment described in and accepted by Certificates of Acceptance and Payment Requests previously filed by Lessee with Lessor constitute all of the Equipment subject to the Payment Schedule. Date: Approved: MISSION VALLEY BANK, as Lessor CITY OF REDL ' S, Lessee By: By: Name: Name: al C Title: Title: MAYOR H-7 SCHEDULE A TO ESCROW AGREEMENT: NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT OF ESCROW AGREEMENT Holman Capital Corporation ("Lessor"), City of Redlands ("Lessee"), and Mission Valley Bank ("Escrow Agent") have entered into an Escrow Agreement dated November 28, 2023 (the "Escrow Agreement'), pursuant to which Lessor, or its Assignee (as defined below), has deposited cash into the Escrow Fund established thereunder, which funds are to be used by Lessee to acquire certain Equipment. Escrow Agent is hereby notified that Lessor has assigned all of its right, title, and interest in and to, but not its obligations under, the Escrow Agreement to Mission Valley Bank ("Assignee"), including, in particular, but without limitation, Lessor's security interest in the Escrow Fund and Lessor's right to approve all payment requests submitted by Lessee. Date: November 28, 2023 LESSOR: HOLMAN CAPITAL CORPORATION LESSEE: CITY OF REDLAN" T ) By: By: Name: Lance Holman Name: Eddie Tejeda Title: President & CEO Title: Mayor ESCROW AGENT: By: Name: Paula Bahamon Title: Vice President Community Development Manager H-8 SCHEDULE A TO ESCROW AGREEMENT: NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT OF ESCROW AGREEMENT Holman Capital Corporation ("Lessor"), City of Redlands ("Lessee"), and Mission Valley Bank ("Escrow Agent") have entered into an Escrow Agreement dated November 28, 2023 (the "Escrow Agreement'), pursuant to which Lessor, or its Assignee (as defined below), has deposited cash into the Escrow Fund established thereunder, which funds are to be used by Lessee to acquire certain Equipment. Escrow Agent is hereby notified that Lessor has assigned all of its right, title, and interest in and to, but not its obligations under, the Escrow Agreement to Mission Valley Bank ("Assignee"), including, in particular, but without limitation, Lessor's security interest in the Escrow Fund and Lessor's right to approve all payment requests submitted by Lessee. Date: November 28, 2023 LESS • HOLMAN CAPITAL CORPORATION LESSEE: CITY OF REDLANDS 4 10.1111 11 ance Holman Name: Eddie Tejeda Tit e: President & CEO Title: Mayor By: ESCROW AGENT: By: By: Name: Paula Bahamon Title: Vice President Community Development Manager H-8 SCHEDULE A TO ESCROW AGREEMENT: NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT OF ESCROW AGREEMENT Holman Capital Corporation ("Lessor"), City of Redlands ("Lessee"), and Mission Valley Bank ("Escrow Agent") have entered into an Escrow Agreement dated November 28, 2023 (the "Escrow Agreement'), pursuant to which Lessor, or its Assignee (as defined below), has deposited cash into the Escrow Fund established thereunder, which funds are to be used by Lessee to acquire certain Equipment, Escrow Agent is hereby notified that Lessor has assigned all of its right, title, and interest in and to, but not its obligations under, the Escrow Agreement to Mission Valley Bank ("Assignee"), including, in particular, but without limitation, Lessor's security interest in the Escrow Fund and Lessor's right to approve all payment requests submitted by Lessee, Date: November 28, 2023 LESSOR: HOLMAN CAPITAL CORPORATION LESSEE: CITY OF REDLANDS By: By: Name: Lance Holman Name: Eddie Tejeda Title: President & CEO Title: Mayor ESCROW AGENT: By: 0,0 61 CI /16-717100 -go; --Paul ihartion— Title: V1e President Community Development Manager H-8 EXHIBIT I RESOLUTION OF LESSEE I-1 RESOLUTION NO. 8521 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDLANDS AUTHORIZING THE EXECUTION AND DELIVERY PAYMENT SCHEDULE UNDER THE EXISTING MASTER EQUIPMENT LEASE -PURCHASE AGREEMENT DATED FEBRUARY 4 2020, AN ESCROW AGREEMENT AND EQUIPMENT SCHEDULE WITH RESPECT TO THE ACQUISITION, PURCHASE, FINANCING, AND LEASING OF CERTAIN VEHICLE AND EQUIPMENT FOR THE PUBLIC BENEFIT; AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS REQUIRED IN CONNECTION THEREWITH; AND AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION. WHEREAS, the City of Redlands (the "Lessee"), a body politic and corporate duly organized and existing as a general law city and political subdivision of the State of California, is authorized by the laws of the State of California to purchase, acquire, and lease personal property for the benefit of the Lessee and those it provides services to and to enter into contracts with respect thereto; WHEREAS, the Lessee desires to purchase, acquire and lease certain vehicles and equipment constituting personal property necessary for the Lessee to perform essential governmental functions in an amount not to exceed Three Million, Six Hundred Sixty Eight Thousand, Four Hundred Forty Four Dollars and Ninety Three Cents $3,668,444.93 (the "Equipment"); WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into a Payment Schedule (together with the Equipment Schedules and all related exhibits, schedules, and certificates, the "Lease Agreements") under an existing Master Equipment Lease -Purchase Agreements with Holman Capital Corporation (the "Lessor") and one Escrow Agreement (together the Disbursement/Payment Request Form and Acceptance Certificate, the "Escrow Agreement") with the Lessor and an escrow bank/agent as the parties may mutually agree on; WHEREAS, the Lessor has agreed to assign all of its rights, title and interest in and to the Equipment, the Lease Agreements and the Escrow Agreement (collectively and together with any related certificates, exhibits, deliverables, or other documents provided in connection therewith, the "Transaction Documents") to an assignee and the Lessee has consented and acknowledged to the foregoing; WHEREAS, the Lessee's City Council, as the governing body of the Lessee, deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Transaction Documents for the purchase, acquisition, and leasing of the Equipment to be therein described on the terms and conditions therein provided; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redlands as follows: 1 I:\Resolutions\Res 8500-8599\8521 Lease Purchase of Fire Apparatus.docx-ms Section 1. Approval of Documents. The governing body of the Lessee hereby authorizes and directs Eddie Tejeda, the Mayor of the City of Redlands, and such other persons as he may delegate (the "Designated Officers"), and each of them individually, for and in the name of and on behalf of the Lessee, to: (a) review, negotiate and approve the form of such Transaction Documents, the parties thereto, and all the terms and provisions contained therein, and (b) execute and deliver the Transaction Documents, in such forms and with such changes, insertions, revisions, corrections, or amendments as shall be approved by the officer executing them. The execution of the foregoing by a Designated Officer shall constitute conclusive evidence of such officer's and the governing body's approval of the Transaction Documents any such changes, insertions, revisions, corrections, or amendments thereto. Section 2. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Transaction Documents to carry out, give effect to, and consummate the transactions contemplated thereby (including the execution and delivery of Certificates of Acceptance and Disbursement/Payment Requests, Notice and Acknowledgements of Assignments, and any tax certificate and agreement, each with respect to and as contemplated in the Transaction Documents) and to take all action necessary in conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Transaction Documents. The Designated Officers and all other officers and employees of the Lessee are hereby directed and authorized to take and shall take all action necessary or reasonably required in order to select, purchase, and take delivery of the Equipment. All actions heretofore taken by officers, employees, and agents of the Lessee that are in conformity with the purposes and intent of this resolution are hereby approved, confirmed, and ratified. Section 3. No General Liability. Nothing contained in this Resolution No. 8521, the Transaction Documents, nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution No. 8521, the Transaction Documents, or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the rental payments payable under the Transaction Documents are special limited obligations of the Lessee as provided therein. Section 4. Appointment of Authorized Lessee Representatives. The Designated Officers are each hereby designated to act as authorized representatives of the Lessee for purposes of the Transaction Documents until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Transaction Documents. Section 5. Severability. If any section, paragraph, clause, or provision of this Resolution shall for any. reason be held to be invalid or unenforceable, the invalidity or 2 I:\Resolutions\Res 8500-8599\8521 Lease Purchase of Fire Apparatus,docx-ms unenforceability of such section, paragraph, clause, or provision shall not affect any of the remaining provisions of this Resolution No. 8521. Section 6. Repealer. All bylaws, orders, and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed as reviving any bylaw, order, resolution, or ordinance or part thereof. Section 7. Effective Date. This Resolution 8521 shall be effective immediately upon its approval and adoption. ADOPTED, SIGNED AND APPROVED this 21st day of November, 2023 ddie Tejeda, Mayo ATTEST: Donaldson, City Clerk 3 I:\Resolutions\Res 8500-8599\8521 Lease Purchase of Fire Apparatus.docx-ms I, Jeanne Donaldson, City Clerk of the City of Redlands, hereby certify that the foregoing resolution was duly adopted by the City Council at a regular meeting thereof held on the 21st day of November, 2023, by the following vote: AYES: NOES: ABSENT: ABSTAINED: None Councilmembers Barich, Davis, Guzman -Lowery, Saucedo; Mayor Tejeda None None Donaldson, City Clerk 4 I:\Resolutions\Res 8500-8599\8521 Lease Purchase of Fire Apparatus.docx-ms EXHIBIT J UCC-1 FINANCING STATEMENT J-1 EXHIBIT K IRS FORM 8038-G [To be prepared by Holman Capital Corporation] K-1 Form 8038_ir (Rev. September 2018) Department of the Treasury Internal Revenue Service Information Return for Tax -Exempt Governmental Bonds ► Under Internal Revenue Code section 149(e) ► See separate instructions. Caution: If the issue price is under $100,000, use Form 8038-GC. ► Go to www.irs.gov/F8038G for instructions and the latest information. OMB No. 1545-0720 Part I Reporting Authority If Amended Return, check here ► 1 Issuer's name City of Redlands 2 Issuer's employer identification number (EIN) 95-6000766 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) 35 Cajon Street, Suite 12 Room/suite 5 Report number (For IRS Use Only) 13 6 City, town, or post office, state, and ZIP code Redlands, CA 92373 7 Date of issue November 28, 2023 8 Name of issue City of Redlands Lease Purchase Financing Schedule 3 9 CUSIP number None 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see instructions) Brunies, Management Analyst 10b Telephone number of officer or other employee shown on 10a (909) 798-7695 11 12 13 14 15 16 17 18 19a b 20 ype of Issue (enter the issue price). See the instructions and attach schedule. Education Health and hospital Transportation Public safety Environment (including sewage bonds) Housing Utilities Other. Describe ► If bonds are TANs or RANs, check only box 19a If bonds are BANs, check only box 19b If bonds are in the form of a lease or installment sale, check box Part III ► ❑ Description of Bonds. Complete for the entire issue for which this form is being filed. 11 12 13 14 $3,663,444 93 15 16 17 18 21 (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 11/28/43 $ $3,668,444.93 $ N/A Lease 12.14 years 5.90 % ses of Nroceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 23 Issue price of entire issue (enter amount from line 21, column (b)) 24 Proceeds used for bond issuance costs (including underwriters' discount) 25 Proceeds used for credit enhancement 26 Proceeds allocated to reasonably required reserve or replacement fund 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . . . 28 Proceeds used to refund prior taxable bonds. Complete Part V . . . . 29 Total (add lines 24 through 28) 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 24 $5000 00 25 Part V 26 27 28 Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . . 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . . . 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) . 34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S 22 23 29 $3,668,444 93 $5000 00 30 $3,663,444 93 years years Form 8038-G (Rev. 9-2018) Signature and Consent Paid Preparer Use Only Form 8038-G (Rev. 9-2018) Part VI Miscellaneous Page 2 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC). See instructions b Enter the final maturity date of the GIC ► (MM/DD/YYYY) c Enter the name of the GIC provider ► 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► Eland enter the following information: b Enter the date of the master pool bond ► (MM/DD/YYYY) c Enter the EIN of the issuer of the master pool bond ► d Enter the name of the issuer of the master pool bond ► 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ► El 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ► ❑ 41a If the issuer has identified a hedge, check here ► ❑ and enter the following information: b Name of hedge provider c Type of hedge ► d Term of hedge ► 42 If the issuer has superintegrated the hedge, check box ► ❑ 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box ► 44 If the issuer has established written procedures to monitor the requirements of section 148, check box ► ❑ 45a If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount of reimbursement ► b Enter the date the official intent was adopted ► (MM/DD/YYYY) Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to process this return, to the person that I have authorized above. (✓.#14244.4.' Z� I (/2'Z2/ 3 Bruni Reyes, Management Analyst Signature of issuer's authorized resentative / Date Type or print name and title 35 36a Print/Type preparer's name Preparer's signature 37 Date Firm's name ► Firm's address ► Check ❑ if self-employed PTIN Firm's EIN ► Phone no. Form 8038-G (Rev. 9-2018) Form 8038-G (Rev. September 2018) Department of the Treasury Internal Revenue Service Information Return for Tax -Exempt Governmental Bonds ► Under Internal Revenue Code section 149(e) See separate instructions. Caution: If the issue price is under$100,000, use Form 8038-GC. ► Go to www.irs.gov/F8038G for instructions and the latest information. OMB No. 1545-0720 If Amended Return, check here ► ❑ illillii 1 Issuer's name City of Redlands 2 Issuer's employer identification number (EIN) 95-6000766 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) 35 Cajon Street, Suite 12 Room/suite 5 Report number (For IRS Use Only) 13 6 City, town, or post office, state, and ZIP code Redlands, CA 92373 7 Date of issue November 28, 2023 8 Name of issue City of Redlands Lease Purchase Financing Schedule 3 9 CUSIP number None 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see instructions) Rn,ni Rpuac_ Mananement Analyst 10b Telephone number of officer or other employee shown on 10a (909) 798-7695 Part II 11 Type of Issue (enter the issue price). See the instructions and attach schedule. Education 12 Health and hospital 13 Transportation 14 Public safety 15 Environment (including sewage bonds) 16 Housing 17 Utilities 18 Other. Describe ► 19a If bonds are TANs or RANs, check only box 19a b If bonds are BANs, check only box 19b 20 If bonds are in the form of a lease or installment sale, check box D ri tion of Bonds Complete for the entire issue for which this form is being filed. 11 12 13 14 $3,663,444 93 15 16 17 18 21 esc p (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 11/28/43 $ $3,668,444.93 $ N/A Lease ` 12.14 years 5.90 % Part IV Uses of Proceeds of Bond Issue (including underwriters' discou 22 Proceeds used for accrued interest 23 Issue price of entire issue (enter amount from line 21, column (b)) 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 25 Proceeds used for credit enhancement 26 Proceeds allocated to reasonably required reserve or replacement fund 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . 28 Proceeds used to refund prior taxable bonds. Complete Part V . . 29 Total (add lines 24 through 28) 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . . 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . . . 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) 34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773E 25 $5000 00 26 27 28 Part V 22 23 29 30 $3,668,444 93 $5000 00 44 93 $3,663,4 ► years ► years Form 8038-G (Rev. 9-2018) EXHIBIT L CLOSING MEMORANDUM $3,668,444.93 LEASE FOR FIRE TRUCK ACQUISITION PROJECT PURSUANT TO PAYMENT SCHEDULE No. 03 ISSUED UNDER THE MASTER EQUIPMENT LEASE -PURCHASE AGREEMENT DATED FEBRUARY 4, 2020 BETWEEN CITY OF REDLANDS AS LESSEE, AND HOLMAN CAPITAL CORPORATION, AS LESSOR Pre -Closing: Pre -Closing will be held at the Lessee's convenience, on or before November 24, 2023. All documents will be executed and two (2) blue ink originals will be overnighted to Holman Capital Corporation, Attn.: Jane Taubman, 25231 Paseo De Alicia, Suite 105, Laguna Hills, CA 92653, for delivery no later than 9:00 am on the morning of November 24, 2023 and held in trust until such time as the wires and original documents are released by the Parties. Closing: (1) By internal funds transfer and pending receipt of original, executed Payment Schedule and related documents, on the morning of November 28, 2023, the Investor is authorized by Lessee to transfer via internal credit the Total Equipment Cost (as set forth below) to Escrow Agent, pursuant to a general ledger credit to the Escrow Account as follows: Bank Name: Mission Valley Bank ABA No: 122243224 Account No: 4007143 Account Name: City of Redlands (2) By wire transfer and pending receipt of original, executed Payment Schedule and related documents, on the morning of November 28, 2023 the Investor is authorized by Lessee to transfer via wire the Issuance Costs (as defined below) to Lessor as follows: Bank Name: Citizens Business Bank ABA No: 122234149 Account No: XXXXXX149 Account Name: Holman Capital Corporation Holman Capital Corporation will confirm disbursement of funds to the Lessee's escrow account and then release all of the original documents held in trust to the investor and forward a copy to the Lessee. Upon confirmation by Escrow Agent of the Lease Proceeds, Lessee will wire closing costs, legal fees and other amounts to the parties in accordance with the invoices attached hereto. L-1 Sources and Uses of Funds: Fire Truck Acquisition Project $3,668,444.93 Paid from Borrower Reserves TOTAL SOURCES 2023 Project Costs for Payment Schedule No. 03 Components Costs of Issuance TOTAL LEASE PROCEEDS L-2 CITY OF RED LAD'&.,LESSEE By: Name: Eddie Tejeda Title: Mayor $3,668,444.93 $3,663,444.93 $5,000.00 $3,668,444.93 ASSIGNMENT AGREEMENT Between HOLMAN CAPITAL CORPORATION and MISSION VALLEY BANK Dated: November 28, 2023 ASSIGNMENT AGREEMENT This ASSIGNMENT AGREEMENT, dated November 28, 2023 (the "Assignment Agreement"), made by the Holman Capital Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware (the "Corporation"), and accepted by Mission Valley Bank (the "Investor"): W ITN ESSETH: WHEREAS, the Corporation and City of Redlands (the "Lessee") have executed and entered into the Payment Schedule No. 03 to the City of Redlands Master Lease -Purchase Agreement, dated November 28, 2023 (collectively, and together with all exhibits thereto, the "Lease"), whereby the Corporation has agreed to lease to the Lessee the items of personal property (together with any replacement parts, additions, substitutions, repairs or accessories now or hereafter incorporated in or affixed to it) described therein (collectively, the "Equipment"); WHEREAS, under and pursuant to the Lease, the Lessee is obligated to make Rental Payments, as defined therein, to the Corporation for the lease of the Equipment; WHEREAS, the Corporation desires to assign without recourse all of its rights to receive the Rental Payments scheduled to be paid by the Lessee under and pursuant to the Lease to the Investor; WHEREAS, in consideration of such assignment, the Investor shall deliver $3,668,444.93 to Mission Valley Bank into an escrow account created under the Escrow Agreement dated November 28, 2023 between the Corporation, Lessee and Mission Valley Bank, as escrow agent (the "Escrow Agreement") for the benefit of the Lessee in satisfaction of the Corporation's obligations under the Lease (the "Escrow Fund") and $140,894.14 to the Corporation; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Assignment Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law and the parties hereto are now duly authorized to execute and enter into the Assignment Agreement; NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: Section 1. Assignment. The Corporation hereby transfers, assigns and sets over to the Investor all of the Corporation's rights, title and interest in and to, but not its obligations under, (a) the Lease and all exhibits thereto, including, in particular, but without limitation: (1) the right to receive and collect all of the Rental Payments and other amounts due from the Lessee under the Lease; (2) the right to take all actions and give all consents under the Lease; and (3) the right to exercise such rights and remedies conferred on the Corporation pursuant to the Lease as may be necessary or convenient (i) to enforce payment of the Rental Payments or any other obligations of the Lessee under the Lease, or (ii) otherwise to protect the interests of the Investor (as assignee of the Corporation) in the event of default by the Lessee under the Lease; (b) the Escrow Agreement, and all amounts credited to the Escrow Fund; (c) all other contracts and documents related to the Lease, including (without limitation) those listed on the attached Schedule A (all of the foregoing together with the Lease and Escrow Agreement being collectively referred to herein as the "Lease Documents"); and (d) the Equipment and all other collateral described in the Lease Documents. The Lease, the Escrow Agreement, the Lease Documents, and the Equipment and all of the Corporation's rights therein are hereinafter collectively referred to as the "Assigned Property." Section 2. Acceptance. The Investor hereby accepts the foregoing assignment. The above assignment is intended to be an absolute and unconditional assignment to the Investor and is not intended as a loan by the Investor to the Corporation. Accordingly, in the event of bankruptcy of the Corporation, the Assigned Property and the Escrow Fund shall not be part of the Corporation's estate. However, if the above assignment is deemed to be a loan by the Investor to the Corporation, then the Corporation shall be deemed to have granted to the Investor, and hereby grants to the Investor, a continuing first priority security interest in the Assigned Property and the Escrow Fund and all proceeds thereof as collateral security for all obligations of the Corporation hereunder and all obligations of the Lessee under the Lease, the Escrow Agreement, and this Assignment Agreement shall be deemed a security agreement with respect to such loan. Section 3. Representations, Warranties, and Agreements. (A) The Corporation represents and warrants to and agrees with the Investor that: (a) the Corporation is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, with corporate powers and authority to own its property and carry on Its business as now being conducted. The Corporation has all licenses (except where the failure to have such licenses would not have a material adverse effect on the Corporation or on Investor's ability to enforce the Lease Documents and its rights and remedies thereunder) necessary to own its property and carry on its business as now being conducted; (b) the Corporation has full power, authority and legal right to enter into and perform its obligations under the Lease, the Escrow Agreement and this Assignment Agreement and the execution, delivery and performance thereof have been duly authorized by all necessary corporate actions on the part of the Corporation, do not require any stockholder approval or the approval or consent of any third party or such required approvals and consents have heretofore been duly obtained; (c) the execution, delivery and performance of the Lease, the Escrow Agreement and this Assignment Agreement do not contravene any provision of the Articles of Incorporation or Bylaws or the Corporation and do not and will not result in any breach of or constitute a default under any indenture, mortgage, contract, agreement or instrument to which Corporation is a party or by which it or its property is bound; 2 (d) the Corporation has good title to the Lease and the Escrow Agreement and good right to sell and transfer the same; (e) the Lease is a valid obligation arising out of a bona fide lease to the Lessee of the Equipment in the ordinary course of business; (f) the Lease Documents contain or describe the entire agreement and all material documents made or given in connection with the Lease and Escrow Agreement, and no representations or inducements not contained in the Lease Documents have been made or given by the Corporation; (g) the original counterpart No. 01 of the Lease constituting chattel paper has been delivered to the Investor, and, by virtue of our delivery of the Lease by the Corporation to the Investor, the Investor has obtained title to the Lease; (h) the Assigned Property and the Escrow Fund is free of any liens, claims, encumbrances, defenses, offsets and counterclaims, real or claimed, except those created by the Lease itself; (i) correct; all statements of fact and unpaid balances shown in the Lease are true and (j) the Lease, Escrow Agreement, and this Assignment Agreement have been duly authorized, executed and delivered by the Corporation, are in full force and effect and constitute the legal, valid and binding obligations of the Corporation enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights of creditors generally and subject to the availability of equitable remedies; (k) the Corporation has complied, and the Lease complies, with all applicable Federal, State and municipal laws, rules or regulations having the force of law as the same are applicable to the Corporation and/or the transactions evidenced by the Lease Documents; (I) the Lessee has no right to prepay except as expressly provided in the Lease; (m) upon execution and delivery of this Assignment Agreement and the due and timely filing of a UCC-1 and/or Title Application/Certificate of Title noting the lien of the Lessor (subject to proper and timely filing by the Investor), the Investor will have a valid and enforceable first security interest in the Equipment, free and clear of all liens and encumbrances (other than those created by the Lease) arising by, through or under the Corporation; (n) the Corporation has subordinated to the Investor all liens and/or encumbrances (statutory and/or otherwise), if any, that the Corporation may have acquired and/or asserted against the Equipment or other collateral described in the Lease; (o) the Lease Documents, Equipment and all other collateral and documents that are the subject of this Assignment Agreement have not been and will not be pledged, assigned or otherwise encumbered by the Corporation to any person other than the Investor; 3 (p) the Corporation shall have no authority to and will not, without the Investor's prior written consent, accept payment of any sum hereafter due under the Lease or Escrow Agreement, repossess or consent to the return of the Equipment or modify the terms of any Lease Document; (q) the Investor may, in the name of the Corporation, endorse any remittances received with respect to the Lease or Escrow Agreement; (r) the Investor is given express permission to release, on terms satisfactory to it or by operation of law or otherwise, or to compromise or adjust any and all rights against and grant extensions of time of payment to the Lessee or any other persons obligated on the Lease Documents or accompanying guarantee or surety contracts, if any, or to agree to substitution of such persons, or to agree to the substitution or release of the Equipment or other collateral, or to grant any other indulgences, without affecting the obligations of the Corporation hereunder, provided that such actions are made in good faith and in a commercially reasonable manner; (s) the Corporation has the requisite authority to execute and deliver this Assignment Agreement and has taken all necessary action to effect this Assignment Agreement. In the event of a default by the Lessee under the Lease, the Investor shall have the unrestricted right to sell or otherwise dispose of the Equipment or other collateral (including the Escrow Fund), subject only to the provisions of the Lease Documents and the Uniform Commercial Code; (t) to the best of the Corporation's knowledge, there is no dispute between the Lessee and any vendor of Equipment relating to the performance of such vendor under its contract to manufacture, deliver or furnish Equipment. The Lessee has not failed to accept, or failed to provide a certificate of acceptance with respect to, any Equipment delivered to it; and (u) the Lease is in full force and effect, there is currently no default in payments to be made by the Lessee pursuant thereto, the Lessee has asserted no set-off, counterclaim or defense with respect to its obligations to perform in accordance with the terms of the Lease, and to the best of the Corporation's knowledge there has been no default in the performance of any other material obligation thereunder or breach of any other material term therein by the Lessee. (B) Indemnification. If the Corporation materially breaches any of the representations and agreements herein contained and, in the case of a breach that cannot be remedied in the Investor's reasonable opinion, such breach remains unremedied for at least 30 days after the Corporation receives written notice thereof from the Investor, the Corporation will indemnify and hold the Investor harmless from any loss, damage or expense (including but not limited to reasonable attorney fees and the expenses of collection, repossession, transportation, storage and insurance in enforcing its rights under the Lease Documents or hereunder, but excluding incidental or consequential damages) incurred by the Investor as a result of the breach of representation or agreement. Any sum not paid by the Corporation to the Investor when due will accrue late charges at the rate of 18% per annum, but only to the extent permitted by law. The obligations set forth in this section shall be limited to the amount paid to the Corporation by the Investor for the assigned transaction. THE CORPORATION WAIVES (AND THE INVESTOR WAIVES BY ACCEPTANCE HEREOF) ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING RELATING TO THIS ASSIGNMENT. 4 Section 4. Covenants. (A) Nonimpairment of Lease. The Corporation agrees that it (1) shall not have any right to amend, modify, compromise, release, terminate or permit prepayment of any Lease Document, and (2) shall not take any action that may impair the payment of Rental Payments or other amounts due under the Lease or the validity or enforceability of any Lease Document. (B) Rental Payments. If the Corporation receives any Rental Payments or other amount due under the Lease Documents, then the Corporation shall receive such payments in trust for the Investor and shall immediately deliver the same to the Investor in the form received, duly endorsed by the Corporation for deposit by the Investor. (C) Delivery of Lease Documents. On the date of this Assignment Agreement (except as otherwise noted herein), the Corporation shall deliver to the Investor, each in form and substance acceptable to the Investor: (i) the original Lease (and all attachments and exhibits thereto), (ii) an original Escrow Agreement (and all attachments and exhibits thereto), (iii) an authorizing Resolution from the Lessee's governing body, (iv) a legal opinion from counsel to the Lessee, (iv) an original assignment agreement with respect to the Escrow Agreement, (v) proof of the Lessee's insurance if and as required by the terms of the Lease and assuming that Equipment has been delivered and accepted, and (vi) a copy of the IRS Form 8038-G filing with respect to the Lease and, as soon as is reasonably possible after the date of this Assignment Agreement, evidence of timely filing thereof. (D) Further Assurances. The Corporation shall execute and deliver to the Investor such documents, in form and substance reasonably satisfactory to the Investor, and the Corporation shall take such other actions, as the Investor may reasonably request from time to time to evidence, perfect, maintain, and enforce the Investor's rights in the Assigned Property and/or to enforce or exercise the Investor's rights or remedies under the Lease and Escrow Agreement. Section 5. Partial Invalidity. If any one or more of the terms, provisions, covenants, or conditions of this Assignment Agreement shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provision, covenants and conditions of this Assignment Agreement shall be affected thereby, and each provision of this Assignment Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 6. Execution in Counterparts. This Assignment Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and which together shall constitute but one and the same instrument. Section 7. Definitions. Unless the context otherwise requires, capitalized terms used herein shall have the meanings specified in the Lease. Section 8. Applicable Law. This Assignment Agreement shall be governed by and construed in accordance with the laws of the State of California. [Signature Page Follows] 5 IN WITNESS WHEREOF, the parties hereto have executed and entered into this Assignment Agreement by their officers thereunto duly authorized as of the day and year first referenced above. H LMA'; CAPITAL ORPORATION Lance Holman le: President & CEO MISSION VALLEY BANK By: Name: Paula Bahamon Title: Vice President Community Development Manager [Signature Page to Assignment Agreement] IN WITNESS WHEREOF, the parties hereto have executed and entered into this Assignment Agreement by their officers thereunto duly authorized as of the day and year first referenced above. HOLMAN CAPITAL CORPORATION By: Name: Lance Holman Title: President & CEO MISSION VALLEY BANK Pa a Bahamon Title: Vice President Community Development Manager [Signature Page to Assignment Agreement] SCHEDULE A TO ASSIGNMENT AGREEMENT ASSIGNMENT FROM: Holman Capital Corporation TO: Mission Valley Bank The Lease Documents covered by the annexed Assignment covering the Lease transaction with City of Redlands include (without limitation) the following: Master Equipment Lease -Purchase Agreement dated February 4, 2020, between City of Redlands and Holman Capital Corporation; Equipment Schedule, along with the Payment Schedule No. 03 attached therein, dated November 28, 2023 Master Equipment Lease -Purchase Agreement, between City of Redlands and Holman Capital Corporation; and Escrow Agreement dated November 28, 2023, between City of Redlands, Holman Capital Corporation, and Mission Valley Bank, as escrow agent, together with any original Certificates of Acceptance and Payment Request Forms delivered in connection therewith as of the date of the Assignment Agreement. 5-1