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INDEX TO LEGAL DOCUMENTS
NON - BANK - QUALIFIED, APPROPRIATION - BASED, ESCROW FUNDED
TAX - EXEMPT EQUIPMENT LEASE - PURCHASE AGREEMENT
DATED JUNE 5, 2015 BY AND BETWEEN
HOLMAN CAPITAL CORPORATION
And
CITY OF SANTA ANA
Lease Documents
Tab 1:
Equipment Lease - Purchase Agreement;
Tab 2:
Exhibit A - Equipment Schedule;
Tab 3:
Exhibit B — Notice and Acknowledgment of Assignment;
Tab 4:
Exhibit C- I -- Insurance Coverage Request;
Tab 5:
Exhibit C -2 — Self - Insurance Rider (if applicable);
Tab 6: Exhibit D - Essential Use Certificate;
Tab 7: Exhibit E - Incumbency Certificate;
Tab 8: Exhibit F - Opinion of Lessee's Counsel;
Tab 9: Exhibit G — Reserved;
Tab 10: Exhibit H - Post Issuance Tax Compliance Procedures
Tab 11: Exhibit I- Escrow Agreement
Tab 12: Resolution of Lessee;
Tab 13: UCC -I Financing Statement with attached Schedule A (prepared and filed by Investor);
Tab 14: Form 8038 -G;
'fab 15: Closing Memorwidum/Payment Proceeds Direction; and
Tab 16: Equipment Acquisition Contract
Assl ent Documents {Lessor and Investor Onl :
Tab 17: Assignment Agreement with Schedule A thereto,
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HOLMAN CAPITAL CORPORATION
City of Santa Anal Holman Capital Corporation Page 0 of I 1
Uquipment Lease- Purchase Agreement May 23, 2015
WCSR 33973592v3
A- 2015 -092
A -2015 -092
INDEX TO LEGAL DOCUMENTS
NON - BANK - QUALIFIED, APPROPRIATION- BASED, ESCROW FUNDED
TAX - EXEMPT EQUIPMENT LEASE - PURCHASE AGREEMENT
DATED JUNE 5, 2015 BY AND BETWEEN
HOLMAN CAPITAL CORPORATION
And
CITY OF SANTA ANA
Lease Documents:
Tab 1:
Equipment Lease - Purchase Agreement;
Tab 2:
Exhibit A - Equipment Schedule;
Tab 3:
Exhibit B — Notice and Acknowledgment of Assignment;
Tab 4:
Exhibit C -1— Insurance Coverage Request;
Tab 5:
Exhibit C -2 — Self - Insurance Rider (if applicable);
Tab 6:
Exhibit D - Essential Use Certificate;
Tab 7:
Exhibit E - Incumbency Certificate;
r"
Tab 8:
Exhibit F - Opinion of Lessee's Counsel;
-
Tab 9:
Exhibit G — Reserved;
Tab 10: Exhibit H - Post Issuance Tax Compliance Procedures
Tab 11: Exhibit I- Escrow Agreement
Tab 12: Resolution of Lessee;
Tab 13: UCC -1 Financing Statement with attached Schedule A (prepared and filed by Investor);
Tab 14: Form 8038 -G;
Tab 15: Closing Memorandum/Payment Proceeds Direction; and
Tab 16: Equipment Acquisition Contract
Assignment Documents (Lessor and Investor Only):
Tab 17: Assignment Agreement with Schedule A thereto.
• s
City of Santa Ana/ Holman Capital Corporation Page 0 of l I
Equipment Lease - Purchase Agreement May 28, 2015
WCSR 339735920
EQUIPMENT LEASE - PURCHASE AGREEMENT
1. Agreement. Subject to the terms and conditions contained in this Equipment Lease- Purchase
Agreement dated June 5, 2015 (this "Lease Agreement "), HOLMAN CAPITAL CORPORATION, as lessor
( "Lessor "), whose mailing address is 29883 Santa Margarita Parkway, Suite 100, Rancho Santa Margarita,
CA 92688, hereby purchases from and agrees to sell, transfer and lease back to the CITY OF SANTA ANA, as
lessee ( "Lessee "), whose mailing address is 20 Civic Center Plaza, Santa Ana, CA 92702, and Lessee
hereby sells to and agrees to acquire, purchase and lease back from Lessor, the items of personal property
(together with any replacement parts, additions, substitutions, repairs or accessories now or hereafter
incorporated in or affixed to it, hereinafter referred to collectively as the "Equipment ") described in
Exhibit A attached hereto.
2. Term. The term of this Lease Agreement (the "Lease Term ") begins as of the Commencement
Date stated in Exhibit A and shall continue so long as any amounts remain unpaid hereunder. The Lease
Term will terminate upon the first to occur of: (a) the exercise by Lessee of the option to purchase the
Equipment pursuant to Paragraph 10, (b) Lessor's election to terminate this Lease Agreement pursuant to
Paragraph 16, (c) Lessee's option to terminate this Lease Agreement pursuant to the second paragraph of
Section 3, and (d) the payment by Lessee of all sums required to be paid by Lessee hereunder.
2.5. Escrow Agreement. On the Commencement Date, Lessor and Lessee shall enter into an
escrow agreement (an "Escrow Agreement ") dated the Commencement Date, between Lessor, Lessee, and
Community Business Bank, as escrow agent, relating to the escrow fund (an "Escrow Fund ") created
thereunder. On the Commencement Date, Lessor shall deposit: $954,954.00 into the Escrow Fund to be
held in escrow and applied upon the express terms and conditions of the Escrow Agreement; for the
acquisition of the Equipment ($949,954.00) and for the payment of issuance costs ($5,000.00), which shall
be disbursed as provided for in the Closing Memorandum of even date herewith.
3. Rental Payments. Lessee agrees to pay the rental payments hereunder for the Lease Term in
the amounts and on the dates identified in Exhibit A. Payment of all rental payments and other amounts
payable hereunder shall be made to Lessor at its above - stated address or as it shall otherwise designate in
writing. As set forth in Exhibit A, a portion of each rental payment is paid as, and represents payment of,
interest, and the balance of each rental payment is paid as, and represents payment of, principal.
Notwithstanding any provision to the contrary in this Lease Agreement, Lessee may terminate this
Lease Agreement at the end of any fiscal year of Lessee as identified in Exhibit A (a "Fiscal Year ") if
sufficient funds are not appropriated by Lessee's Governing Body to pay rental payments and other
amounts due hereunder during the next succeeding Fiscal Year (an "Event of Nonappropriation "). Lessee
hereby agrees to notify Lessor at least 30 days prior to the last day of its then current Fiscal Year of the
occurrence of an Event of Nonappropriation or, if nonappropriation has not occurred by that date,
promptly upon the occurrence of an Event of Nonappropriation.
Lessee represents and warrants that: (a) it has made sufficient appropriations or has other legally
available funds to pay all rental payments hereunder due (if any) during the current Fiscal Year hereunder
ending on June 30, 2015; (b) the officer of Lessee responsible for budget preparation will do all things
lawfully within his/her power to obtain appropriated funds for the payment of rental payments and other
amounts required to be paid hereunder in each next succeeding Fiscal Year for the Lease Term with the
understanding that any such appropriation is within the sole discretion of the Lessee's Governing Body;
and (c) Lessee acknowledges that Lessor has relied upon these representations as an inducement to enter
into this Lease Agreement . If an Event of Nonappropriation hereunder shall occur, Lessee agrees to
comply with the provisions of Section 16(c) and (d), if and as applicable, on or before the effective date of
termination.
City of Santa Ana / Holman Capital Corporation Page 1 of 11
Equipment Lease - Purchase Agreement May 28, 2015
WCSR 339735920
Lessee's obligation to pay rental payments and any additional amounts payable hereunder
constitutes a current obligation payable exclusively from legally available funds and shall not be construed
to be an indebtedness within the meaning of any applicable constitutional or statutory limitation or
requirement.
4. Essentiality. Subject to Paragraph 3 of this Lease Agreement, Lessee's present intention is to
make rental payments for the Lease Term as long as it has sufficient appropriations or, if any /applicable,
other legally available funds. Lessee represents that, with respect hereto, (a) the use and operation of the
Equipment is essential to its proper, efficient, and economic governmental operation and (b) the functions
performed by the Equipment could not be transferred to other equipment available for its use. Lessee does
not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last rental
payment scheduled to be paid hereunder. On the Commencement Date, Lessee shall complete and provide
Lessor a certificate in the form of Exhibit D.
5. Disclaimer of Warranties. LESSEE REPRESENTS THAT IT HAS SELECTED THE
EQUIPMENT PRIOR TO HAVING REQUESTED LESSOR TO FINANCE THE SAME. LESSEE
AGREES THAT LESSOR HAS NOT MADE ANY, AND MAKES NO, REPRESENTATIONS OR
WARRANTIES OF ANY KIND OR NATURE, DIRECTLY OR INDIRECTLY, EXPRESS OR
IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING (WITHOUT LIMITATION)
THE SUITABILITY OF THE EQUIPMENT, ITS DURABILITY, ITS FITNESS FOR ANY
PARTICULAR PURPOSE, ITS MERCHANTABILITY, ITS CONDITION, ITS CAPACITY, ITS
OPERATION, ITS PERFORMANCE, ITS DESIGN, ITS MATERIALS, ITS WORKMANSHIP
AND /OR ITS QUALITY. AS BETWEEN LESSEE AND LESSOR, LESSEE LEASES,
PURCHASES AND ACQUIRES THE EQUIPMENT "AS IS" "WHERE IS" AND "WITH ALL
FAULTS." Lessor hereby assigns to Lessee, to the extent that it may lawfully do so, so long as no Event
of Default and no Event of Nonappropriation shall have occurred and be continuing hereunder, all rights
and benefits that Lessor may have under any warranty, guaranty or the like that may be made with respect
to the Equipment by the Contractor thereof (as such term is defined in Exhibit A hereto). Lessor shall not
be liable to Lessee or any third party for any loss, damage, injury or expense of any kind or nature caused
directly or indirectly by any of the Equipment or the use or maintenance thereof or any defect therein, the
failure of operation thereof or by any interruption of service or loss of use thereof or for any loss of
business or damage whatsoever and howsoever caused. Lessor makes no warranty as to the treatment of
this Lease Agreement for tax or accounting purposes or as to the compliance of the Equipment with
applicable government regulations or requirements. Lessee agrees to look solely to the Contractor for any
claim arising from any defect, breach of warranty, failure or delay in delivery, mis- delivery or inability to
use the Equipment for any reason whatsoever and Lessee's obligations to Lessor hereunder shall not in any
manner be affected thereby, including (without limitation) Lessee's obligations to pay Lessor all rental
payments and other amounts payable hereunder. Lessee (or the County or 911 System Upgrade Committee
of which it is a part) has selected both the Equipment and the Contractor and acknowledges that Lessor has
not participated in any way in Lessee's selection of the Equipment or the Contractor. Lessor has no
obligation to install, erect, test, adjust, service or maintain the Equipment.
6. Delivery and Acceptance; Quiet Enjoyment. Lessee, or its assignee, shall accept the
Equipment for which disbursement is requested from the Escrow Fund upon its delivery and authorizes
Lessor to insert on Exhibit A any additional description of the items of Equipment so delivered. As
evidence of that acceptance, Lessee shall execute and deliver to Lessor a Certificate of Acceptance in the
form attached as Exhibit A to the Escrow Agreement. Regardless of whether Lessee has furnished a
Certificate of Acceptance pursuant to this Paragraph 6, by making a rental payment after its receipt of the
Equipment, Lessee shall be deemed to have accepted the Equipment on the date of such rental payment for
purposes hereof. During the Lease Term, Lessee shall be entitled to quiet enjoyment of the beneficial use
of said Equipment, subject to the terms of this Lease Agreement. Lessor hereby acknowledges and
City of Santa Ana/ Holman Capital Corporation
Equipment Lease - Purchase Agreement
WCSR 339735920
Page 2 of 11
May 28, 2015
consents to the assignment of the Lessee's interest in the Equipment to the County of Orange (the
"County" or "Designated Assignee "). Lessor expressly acknowledges that the Designated Assignee shall
own and operate the Equipment for the collectively beneficial use of participating agencies, including the
Lessee as set forth in the Joint Agreement for Operation, Maintenance, and Financial Management of the
800 MHz Countywide Coordinated Communication System dated November 2004 and all amendments
thereto between the County and participating agencies (the "Management Agreement "). Lessor
acknowledges that Lessee is solely responsible for the payment of its pro -rata share of the System for use
of the Management Agreement.
7. Use of Equipment; Maintenance and Repairs. Lessee shall keep the Equipment within the
State at the "Equipment Location" stated in Exhibit A and Lessee shall not remove any of the Equipment
therefrom (except as within the Equipment's normal and contemplated use) without Lessor's prior written
notice. Lessee, or the Designated Assignee, shall use the Equipment in a careful manner and shall at all
times, pursuant to the terms of the Management Agreement with the County of Orange and member
agencies, keep the Equipment in good operating condition, repair and appearance and comply with all
laws, ordinances, regulations or requirements of any governmental authority, official, board or department
relating to its installation, possession, use or maintenance. Lessee, or the Designated Assignee, shall not
make any alterations, additions, or improvements to the Equipment that are not readily removable without
causing damage to or reducing the value of the Equipment. All alterations, additions, or improvements not
readily removable shall become property of Lessor. Notwithstanding the foregoing, Lessor acknowledges
and agrees that the Equipment is the Lessee's pro rata share or portion of a county -wide System (as
defined in Exhibit A) upgrade. As such, the parties understand and agree that Lessee's obligations to
repair, upgrade, and make any modifications or alterations to the Equipment shall: (1) be solely with
respect to the Equipment (i.e. its pro rata Cost Share (as defined in Exhibit A) thereof) , and (2) not be
required to the extent that either the entire county -wide system is not modified, or such modifications may
interfere with the rights of other participants in the System.
8. Security Interest; Title to Equipment. To secure the performance of all of Lessee's
obligations hereunder, Lessee hereby grants to Lessor, and Lessor shall have and retain, a security interest
on the beneficial use of the Equipment delivered hereunder and on any attachments, proceeds therefrom.
Lessee agrees to execute and deliver such additional documents, including, without limitation, opinions of
counsel, financing statements, notices and similar instruments, in form satisfactory to Lessor, that Lessor
deems necessary or appropriate to establish and maintain its security interest in the Equipment or for the
confirmation of Lessor's rights hereunder. As further security therefor, Lessee hereby grants to Lessor a
first priority security interest in the cash and negotiable instruments from time to time in the Escrow Fund
and all proceeds (cash and non -cash) thereof, and agrees with respect thereto that Lessor shall have all the
rights and remedies of a secured party under the applicable Uniform Commercial Code. Lessee, at its
expense, will protect and defend Lessee's rights in the Equipment and Lessor's rights and interests therein
and will keep the Equipment free and clear from any and all claims, liens, encumbrances and legal
processes of Lessee's creditors and other persons; provided, however, that Lessee shall not be responsible
for liens or encumbrances permitted by other participants or users of the System. Lessor shall have the
right during normal hours, upon reasonable prior notice to Lessee, to enter upon any premises owned by
the Lessee and where the Equipment is located in order to inspect the Equipment.
(b) Solely with respect to Equipment that is not comprised of vehicles and during the Lease Term,
ownership and legal title of all of the Equipment and all substitutions, repairs, modifications, and
replacements shall be in the Designated Assignee, and Lessee shall request the Designated Assignee to
take all necessary action to vest such ownership and title in Lessee. Lessor does not own the Equipment,
and, by this Lease Agreement, Lessor is merely financing the acquisition of the Equipment for the Lessee.
Lessor has not been in the chain of title, does not operate, control or have possession or control over the
Equipment, or Lessee's, or the Designated Assignee's use, maintenance, operation, storage, or
City of Santa Ana! Holman Capital Corporation Page 3 of 11
Equipment Lease - Purchase Agreement May 28, 2015
WCSR 339735920
maintenance of the Equipment. Lessee is entitled to use and possession of the Equipment, subject to the
rights of Lessor hereunder (including its interest in the Equipment as the lessor hereunder). If Lessor
terminates this Lease Agreement pursuant to Paragraph 16 hereof or an Event of Nonappropriation occurs
hereunder, Section 16(c) of this Lease Agreement shall be applicable. Lessee, at its expense, will protect
and defend Lessee's rights in the Equipment and Lessor's rights and interests therein and will keep the
Equipment free and clear from any and all claims, liens, encumbrances and legal processes of Lessee's
creditors and other persons; provided, however, Lessee shall not be responsible for claims, liens or
encumbrances permitted by other participants or users of the Equipment.
(c) As further security therefor, Lessee hereby agrees with respect thereto that Lessor shall have all the
rights and remedies of a secured party under the applicable Uniform Commercial Code with respect to any
and all Equipment hereunder, except that Lessor will not have the right to dispossess other users and
participants in the System or otherwise interfere with the operation of the System.
9. Personal Property. The Equipment shall be and remain personal property notwithstanding the
manner in which it may be attached or affixed to realty. Lessee covenants that, unless Lessee owns the
premises in which the Equipment is to be located and such premises are not subject to any mortgage or
lease. At Lessor's request, Lessee shall provide Lessor with a waiver from each landlord and /or mortgagee
of the premises in which the Equipment is to be located of which Lessee has control thereof of any rights
that such landlord and/or mortgagee may have in respect of any of the Equipment. Lessee will also
provide any information as may be reasonably requested by Lessor with respect to any fixture filings that
Lessor may deem necessary.
10. Purchase of Equipment by Lessee; Prepayment. At the option of Lessee, and provided that
no Event of Default has occurred and is continuing hereunder, Lessor's interest in all, but not less than all,
of the Equipment will be transferred, conveyed and assigned to Lessee, and this Lease Agreement shall
terminate: (a) upon payment in full of the rental payments and all other payments then due hereunder or
(b) on any rental payment date hereunder, provided Lessee shall have delivered written notice at least 30
days prior to such date of Lessee's intention to purchase the Equipment pursuant to this provision, by
paying to Lessor, in addition to the rental payment due on such date, an amount equal to the concluding
payment (the "Concluding Payment ") shown for such rental payment date in the rental payment schedule
in Exhibit A. Lessee shall not have the option to purchase the Equipment hereunder as provided in the
foregoing clause (b) on any rental payment date hereunder for which a Concluding Payment is not stated in
the rental payment schedule.
11. Risk of Loss. Lessee shall bear the entire risk of loss, theft, destruction of or damage to the
Equipment or any part thereof from any cause whatsoever during the Lease Term and thereafter until
redelivery to a location designated by Lessor, and shall not be relieved of the obligation to pay rental
payments or any other obligation hereunder because of any such occurrence. If (a) the Equipment or any
portion thereof hereunder is destroyed (in whole or in part) or is damaged by fire or other casualty or
(b) title to, or the temporary use of, the Equipment or any part thereof hereunder is taken under the
exercise of the power of eminent domain, Lessee shall immediately notify Lessor. Lessee and Lessor shall
cause the net proceeds of any insurance claim (including self - insurance) to which Lessee in entitled to or
condemnation award which Lessee receives to be applied, at Lessor's option, to (i) the prompt repair,
restoration, modification or replacement of the Equipment so affected or (ii) the payment in full of the then
applicable Concluding Payment. Any balance of net proceeds remaining after completion of such work or
payment of such Concluding Payment shall be paid promptly to Lessee. If the net proceeds are insufficient
to pay the costs of such repair, restoration, modification or replacement or to pay such Concluding
Payment in full, Lessee shall, at Lessor's direction, either complete the work or pay the then applicable
Concluding Payment in full and in either case pay any cost in excess of the amount of net proceeds, but
only from legally available funds.
City of Santa Ana / Holman Capital Corporation Page 4 of I 1
Equipment Lease - Purchase Agreement May 28, 2015
WCSR 33973592v3
12. Insurance. Lessee is self - insured up to $1,000,000 with respect to equipment such as the
Equipment under an actuarially sound self - insurance program that is acceptable to and approved by Lessor,
Lessee shall maintain during the Lease Term such actuarially sound self - insurance program and shall
provide Lessor a certification in the form of Exhibit C -2 together with evidence of the self - insurance
program in form and substance satisfactory to Lessor.
13. Fees; Taxes and Other Governmental Charges; Liens. Lessee covenants and agrees at all
times to keep the Equipment free and clear of all levies, liens (other than those created hereunder) and
encumbrances, and to pay the Lessee's pro -rata share of charges, taxes and fees (including any recording
or stamp fees or taxes) that may now or hereafter be imposed upon the ownership, leasing, rental, sale,
purchase, possession or use of the Equipment and shall give Lessor immediate written notice of any of the
foregoing. If any of same shall remain unpaid when due, Lessor may pay same and add such payment to
the rental payment next becoming due, as additional rent. Lessee shall execute and deliver to Lessor upon
Lessor's request such further instruments and documents containing such other assurances as Lessor
deems necessary or advisable for the confirmation or perfection of Lessor's rights hereunder or to
otherwise effectuate the intent of this Lease Agreement.
14. Indemnification. To the extent authorized by law, Lessee shall indemnify and save Lessor,
its officers, employees, agents, servants, successors and assigns, harmless from any and all liabilities
(including, without limitation, negligence, tort and strict liability), damages, expenses, claims, actions,
proceedings, judgments, settlements, losses, liens and obligations, including (without limitation) attorneys'
fees and costs ( "Claims "), arising out of the ordering, purchase, delivery, rejection, non - delivery,
ownership, selection, possession, operation, control, use, condition, maintenance, transportation, storage,
repair, return or other disposition of the Equipment, any claims arising under federal, state or local
environmental protection and hazardous substance clean up laws and regulations and any claims of patent,
trademark or copyright infringement or, if Lessee shall be in default hereunder, arising out of the condition
of any item of Equipment sold or disposed of after use by Lessee, including (without limitation) claims for
injury to or death of persons and for damage to property. The indemnities, assumption of liabilities and
obligations herein provided shall be payable solely from funds legally available for such purpose and shall
continue in full force and effect notwithstanding the expiration, termination or cancellation of this Lease
Agreement for any reason whatsoever. However, Lessee shall not be obligated to indemnify Lessor from
Claims arising from the actual, proven, direct and proximate gross negligence or willful misconduct of
Lessor.
15. Assignment; Subleasing. EXCEPT AS OTHERWISE AUTHORIZED HEREIN, LESSEE
SHALL NOT ASSIGN, PLEDGE, MORTGAGE, SUBLET OR OTHERWISE TRANSFER OR
ENCUMBER ANY OF ITS RIGHTS UNDER THIS LEASE AGREEMENT, THE ESCROW
AGREEMENT (INCLUDING THE ESCROW FUND CREATED THEREUNDER) OR IN THE
EQUIPMENT OR ANY PART THEREOF, NOR PERMIT ITS USE BY ANYONE OTHER THAN
LESSEE AND ITS REGULAR EMPLOYEES, WITHOUT LESSOR'S PRIOR WRITTEN CONSENT.
ANY SUCH PURPORTED TRANSFER, ASSIGNMENT OR OTHER ACTION WITHOUT LESSOR'S
PRIOR WRITTEN CONSENT SHALL BE VOID.
Lessor may, at any time and from time to time, assign, transfer or otherwise convey all or any part
of its interest in the Equipment, this Lease Agreement, and the Escrow Agreement (including the Escrow
Fund created thereunder), including, but not limited to, Lessor's rights to receive the rental payments
hereunder or any part thereof (in which event Lessee agrees to make all rental payments thereafter to the
assignee designated by Lessor) without the necessity of obtaining Lessee's consent, provided, however,
Lessor will deliver to Lessee prior written notice of an assignment. No such assignment, transfer or
conveyance shall be effective until Lessee shall have received a written notice of assignment that discloses
the name and address of each such assignee. During the term of this Lease Agreement, Lessee shall keep,
City of Santa Ana / Holman Capital Corporation Page 5 of 11
Equipment Lease- Purchase Agreement May 28, 2015
WCSR 339735920
or cause to be kept, a complete and accurate record of all such assignments with respect hereto in form
necessary to comply with Section 149 of the Internal Revenue Code of 1986, as amended (the "Code ").
Lessee agrees (unless otherwise stated), if so requested, to acknowledge any such assignment in writing
within 15 days after request therefor in the form attached as Exhibit B hereto. Lessee further agrees that
any moneys or other property received by Lessor as a result of any such assignment, transfer or
conveyance shall not inure to Lessee's benefit.
16. Events of Default; Remedies. (a) Each of the following events constitutes an "Event of
Default" hereunder: (i) Lessee fails to pay in full the rental payment due hereunder on any date upon which
such rental payment is due; (ii) Lessee fails to comply with any other agreement or covenant of Lessee
hereunder for a period of 30 days following receipt of written notice of violation of such agreement or
covenant and demand that such violation be remedied; (iii) Lessee institutes any proceedings under any
bankruptcy, insolvency, reorganization or similar law or a receiver or similar officer is appointed for
Lessee or any of its property; (iv) any warranty, representation or statement made in writing by or on
behalf of Lessee in connection herewith is found to be incorrect or misleading in any material respect on
the date made; (v) actual or attempted sale, lease or encumbrance of any of the Equipment or the making of
any levy, seizure or attachment thereof or thereon; or (iv) Lessee defaults in its obligations under any other
agreement for borrowing money, lease financing of property, or otherwise receiving credit and the obligee
thereunder (or trustee on its behalf) is permitted to exercise any remedies under the agreement.
(b) Immediately upon the occurrence of an Event of Default hereunder: (i) Lessor may demand
payment of all rental payments and other amounts that may have been appropriated through the end of the
then current Fiscal Year and terminate this Lease Agreement or Lessee's rights hereunder; and (ii) Upon
return (if applicable as per Section 16(c) hereunder), if the Equipment is damaged or otherwise made less
suitable for the purposes for which it was manufactured than when delivered to Lessee, Lessee agrees, at
its option, to (x) repair and restore the Equipment to the same condition in which it was received by Lessee
(reasonable wear and tear excepted) or (y) pay to Lessor the reasonable costs of such repair and
restoration.
(c) Following any Event of Default or Event of Nonappropriation hereunder, Lessor may request
and require that Lessee refrain from using the Equipment, return the Equipment (but only that portion of
the Equipment, if any, that is used solely by the Lessee and that would not affect the rights of other users
and participants in the System), purge any software and programming from its operating systems and
destroy any hard or electronic copies of such software and programming. Upon Lessor's request, Lessee
will provide Lessor with reasonable certifications as to the foregoing. In the event that any such
Equipment is returned to the Lessor, Lessee shall execute and deliver such documents as may reasonably
be required to restore title to and possession of the Equipment to Lessor, free and clear of all liens and
security interests arising by, through or under the Lessee to which the Equipment may have become
subject. If Lessor is able to (i) recover any Equipment, (ii) sell or otherwise liquidate the Equipment (or
any portion thereof) following an Event of Default or an Event of Nonappropriation, and (iii) realize net
proceeds (after payment of costs) in excess of total rental payments that would have been paid during the
Lease Term plus any other amounts then due hereunder, Lessor shall immediately pay the amount of any
such excess to Lessee.
(d) If Lessor terminates this Lease Agreement under this Paragraph 16 or an Event of
Nonappropriation occurs hereunder and in either case Lessee continues to use the Equipment or if Lessee
otherwise refuses to pay rental payments hereunder due during a Fiscal Year for which Lessee's governing
body has appropriated sufficient legally available funds to pay such rental payments due hereunder, Lessor
(i) may declare the rental payments due and owing for the Fiscal Year for which such appropriations have
been made to be immediately due and payable, (ii) shall be entitled to bring such action at law or in equity
City of Santa Ana / Holman Capital Corporation
Equipment Lease- Purchase Agreement
WCSR 33973592x3
Page 6 of I 1
May 28, 2015
to recover money and other damages attributable to such holdover period for the Equipment, and (iii) will
be entitled to recover interest on all such amounts at the Default Rate.
(e) Lessor shall also be entitled to exercise any or all remedies available to a secured party under
the applicable Uniform Commercial Code and all other rights and remedies that Lessor may have at law or
in equity, except that Lessor may not recover any Equipment that would interfere with the rights of any
other users or participants in the System, or involuntary dispossess any party other than the Lessee of its
right to use the System. All rights and remedies of Lessor shall be cumulative and not alternative.
Lessor's failure to exercise or delay in exercising any right or remedy shall not be construed as a waiver
thereof, nor shall a waiver on one occasion be construed to bar the exercise of any right or remedy on a
future occasion. Lessee agrees to reimburse Lessor for any expenses (including attorney's fees)
reasonably incurred by Lessor with respect to the enforcement of any of the remedies listed above or any
other remedy available to Lessor, but only from legally available funds.
17. Late Payments. Whenever any rental payment or other amount payable to Lessor by Lessee
hereunder is not paid within ten (10) days after such due date, Lessee agrees to pay Lessor a late charge on
the delinquent amount at the "Default Rate," which is one percent (1 %) per month, or the maximum
amount permitted under applicable law, whichever is less. Such amount(s) shall be payable solely from
legally available funds in addition to all amounts payable by Lessee as a result of the exercise of any of the
remedies herein provided.
18. Rental Payments to Be Unconditional. Except as expressly set forth to the contrary in this
Lease Agreement (including Paragraph 3), Lessee agrees that as of the Commencement Date, Lessee's
obligations hereunder are absolute and unconditional and shall continue without set -off, deduction,
counterclaim, abatement, recoupment, or reduction and regardless of any disability of Lessee to use the
Equipment or any part thereof because of any reason including, but not limited to, war, act of God,
governmental regulations, strike, loss, damage, destruction, obsolescence, failure of or delay in delivery or
failure of the Equipment to operate properly.
19. Tax Covenants. Lessee agrees that it will not take any action that would cause the interest
component of rental payments hereunder to be or to become ineligible for the exclusion from gross income
of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause to be
taken, in a timely manner, any action which omission would cause the interest component of rental
payments hereunder to be or to become ineligible for the exclusion from gross income of the owner or
owners thereof for federal income tax purposes. Lessee agrees to (a) execute and deliver to Lessor, upon
Lessor's request, a tax certificate and agreement in form and content acceptable to Lessor and Lessee,
relating to the establishment and maintenance of the excludability from gross income of the interest
component of rental payments hereunder for federal income tax purposes; (b) complete and file in a timely
manner an information reporting return as required by the Code; and (c) rebate an amount equal to excess
earnings on the Escrow Fund to the federal government if required by, and in accordance with,
Section 148(f) of the Code, and make the determinations and maintain the records required by the Code.
Lessee represents that neither Lessee nor any agency or unit of Lessee has on hand any property,
including cash and securities, that is legally required or otherwise restricted (no matter where held or the
source thereof) to be used directly or indirectly to purchase the Equipment. Lessee has not and will not
establish any funds or accounts (no matter where held or the source thereof) the use of which is legally
required or otherwise restricted to pay directly or indirectly rental payments hereunder. Lessor and Lessee
certify that, so long as any rental payments hereunder remain unpaid, moneys on deposit in the Escrow
Fund will not be used in a manner that will cause this Lease Agreement to be classified as an "arbitrage
bond" within the meaning of Section 148(a) of the Code.
City of Santa Ana / Holman Capital Corporation
Equipment Lease - Purchase Agreement
WCSR 339735920
Page 7 of 11
May 28, 2015
If Lessee breaches the covenants contained in this Paragraph 19, the interest component of rental
payments hereunder may become includible in gross income of the owner or owners thereof for federal
income tax purposes. In such event, Lessee agrees to pay promptly after any such determination of
taxability and on each rental payment date thereafter to Lessor an additional amount determined by Lessor
to compensate such owner or owners for the loss of such excludability (including without limitation,
compensation relating to interest expense, penalties or additions to tax), which determination shall be
conclusive (absent manifest error).
It is Lessor's and Lessee's intention that this Lease Agreement not constitute a "true" lease for
federal income tax purposes and, therefore, it is Lessor's and Lessee's intention that Lessee be considered
the owner of the Equipment hereunder for federal income tax purposes.
20. Lessee Representations and Warranties. Lessee hereby represents and warrants to and
agrees with Lessor that:
(a) Lessee is a political subdivision of the State of California, within the meaning of
Section 103(c) of the Code, and will do or cause to be done all things necessary to preserve and keep in
full force and effect its existence as such.
(b) Lessee has the power and authority under applicable law to enter into the transactions
contemplated by this Lease Agreement and the Escrow Agreement and has been duly authorized to execute
and deliver this Lease Agreement and the Escrow Agreement and to carry out its obligations hereunder and
thereunder. Lessee has provided to Lessor a full, true and correct copy of a resolution or other appropriate
official action of Lessee's governing body specifically authorizing Lessee to execute and deliver this Lease
Agreement and the Escrow Agreement and all documents contemplated hereby and thereby. Lessee has
provided to Lessor a full, true, and correct copy of an Incumbency Certificate in substantially the form
attached as Exhibit F hereto relating to the authority of the officers who have executed and delivered this
Lease Agreement and who will execute and deliver this Lease Agreement and the Escrow Agreement and
all documents in connection herewith and therewith on behalf of Lessee.
(c) All requirements have been met and procedures have occurred in order to ensure the
enforceability of this Lease Agreement and the Escrow Agreement, and Lessee has complied with such
public bidding requirements, if any, as may be applicable to the transactions contemplated by this Lease
Agreement and the Escrow Agreement.
(d) Lessee is not subject to any legal or contractual limitation or provision of any nature
whatsoever that in any way limits, restricts or prevents Lessee from entering into this Lease Agreement
and the Escrow Agreement, or performing any of its obligations hereunder or thereunder, except to the
extent that such performance may be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally.
(e) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or
by any court, public board or body, known to be pending or threatened against or affecting Lessee, nor to
the best knowledge of Lessee is there any basis therefor, wherein an unfavorable decision, ruling or finding
would materially adversely affect the transactions contemplated by this Lease Agreement or the Escrow
Agreement, or any other agreement or instrument to which Lessee is a party and that is used or
contemplated for use in the consummation of the transactions contemplated by this Lease Agreement or
the Escrow Agreement. All authorizations, consents, and approvals of governmental bodies or agencies
required in connection with the execution and delivery by Lessee of this Lease Agreement and the Escrow
Agreement or in connection with the carrying out by Lessee of its obligations hereunder and thereunder
have been obtained.
(f) The payment of the rental payments or any portion thereof hereunder is not (under the
terms of this Lease Agreement) directly or indirectly (i) secured by any interest in property used or to be
City of Santa Ana / Holman Capital Corporation
Equipment Lease - Purchase Agreement
WCSR 339735920
Page 8 of I I
May 28, 2015
used in any activity carried on by any person other than a state or local governmental unit or payments In
respect of such property; or (ii) on a present value basis, derived from payments (whether or not to Lessee)
in respect of property, or borrowed money, used or to be used in any activity carried on by any person
other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any
activity carried on by any person other than a state or local government unit. No portion of the purchase
price for the Equipment will be used, directly or indirectly, to make or finance loans to any person other
than Lessee. Lessee has not entered into any management or other service contract with respect to the use
and operation of the Equipment as previously described.
(g) The entering into and performance of this Lease Agreement and the Escrow Agreement
will not violate any judgment, order, law or regulation applicable to 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 Lessee or on the Equipment pursuant to an indenture, mortgage, deed of
trust, bank loan or credit agreement, or other instrument to which Lessee is a party or by which it or its
assets may be bound, except as herein provided.
(h) Lessee's name as indicated on the first page of this Lease Agreement is its true, correct,
and complete legal name.
(i) The useful life of the Equipment will not be less than the Lease Term hereof.
0) Lessee has entered into this Lease Agreement for the purpose of purchasing, acquiring,
and leasing the Equipment and not for the purpose of refinancing any outstanding obligation of Lessee
more than 90 days in advance of its payment or prepayment date. The purchase price for the Equipment
has been or will be paid directly by Lessor from the Escrow Fund to the Contractor (or to the Lessee or
County as a reimbursement as applicable), and no portion of the purchase price for the Equipment has been
or will be paid to Lessee as reimbursement for any expenditure paid by Lessee more than 60 days prior to
the execution and delivery hereof, unless a proper reimbursement resolution has been passed and the
Lessee has complied with all reimbursement requirements under the Code, including, without limitation,
Treasury Reg. 1:150.
(k) The application, statements, and credit or financial information submitted by it to Lessor
are true and correct and made to induce Lessor to enter into this Lease Agreement and the Escrow
Agreement.
(1) During the term of this Lease Agreement, Lessee shall (i) provide Lessor, at or prior to the
end of each Fiscal Year (commencing with the current Fiscal Year), with current budgets or other proof of
appropriation for the ensuing Fiscal Year and such other information relating to Lessee's ability to
continue the Lease Term for the next succeeding Fiscal Year as may be reasonably requested by Lessor
and (ii) furnish or cause to be furnished to Lessor, at Lessee's expense, as soon as available and in any
event not later than 180 days after the close of each Fiscal Year, the audited financial statements of Lessee
at the close of and for such Fiscal Year, all in reasonable detail, audited by and with the report of Lessee's
auditor.
(m) On the Commencement Date, Lessee shall cause to be executed and delivered to Lessor an
Opinion of Lessee's Counsel in substantially the form attached as Exhibit G hereto.
(n) Lessee shall pay the excess (if any) of the actual costs of acquiring the Equipment
hereunder over the amount deposited by Lessor in the Escrow Fund and interest earnings thereon.
(o) Lessee has experienced no material change in its financial condition since June 30, 2014.
(p) Lessee acknowledges that: (a) Lessor is acting solely for its own account and not as a
fiduciary for Lessee or in the capacity of broker, dealer, municipal securities underwriter or municipal
advisor; (b) Lessor has not provided, and will not provide, financial, legal, tax, accounting or other advice
to or on behalf of Lessee with respect to its acquisition of the Equipment; and (c) Lessee has sought and
City of Santa Ana / Holman Capital Corporation
Equipment Lease - Purchase Agreement
WCSR 33973592v3
Page 9 of I I
May 28, 2015
obtained financial, legal, tax, accounting and other advice (including as it relates to structure, timing, terms
and similar matters) with respect to this Lease Agreement from its financial, legal and other advisors (and
not Lessor) to the extent that Lessee desired to obtain such advice.
21. Execution in Counterparts; Chattel Paper. This Lease Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument; provided, however, that only Counterpart No. 1 hereof shall constitute chattel paper for
purposes of the applicable Uniform Commercial Code.
22. Applicable Law. This Lease Agreement shall be construed under the laws of the State of
California.
23. Binding Effect; Severability; Survival. This Lease Agreement shall not become effective
until accepted by Lessor at its herein- described office, and upon such acceptance shall inure to and bind
the parties, their successors, legal representatives, and assigns. No provision of this Lease Agreement that
may be construed as unenforceable shall in any way invalidate any other provision hereof, all of which
shall remain in full force and effect.
24. Miscellaneous Provisions. Any notice to a party hereunder shall be deemed given when
mailed to that party by certified mail, return receipt requested, at its address set forth herein or such other
address as either may designate for itself in such notice to the other. This Lease Agreement and the
Escrow Agreement constitute the entire mutual understanding of the parties regarding the subject matter
hereof and thereof and may not be modified except in writing, signed by the party against whom such
modification is asserted. Upon the request of Lessor, Lessee shall at any time and from time to time
execute and deliver such further documents and do such further acts as Lessor may reasonably request in
order fully to effect the purposes hereof and any assignment hereof. If a court with competent jurisdiction
rules that the interest rate charged hereunder exceeds the maximum rate of interest allowed by applicable
law, then the effective rate of interest hereunder shall be automatically reduced to the maximum lawful
rate allowable under the applicable laws.
[Remainder ofpage intentionally left blank]
City of Santa Ana / Holman Capital Corporation
Equipment Lease - Purchase Agreement
WCSR 339735920
Page 10 of 11
May 28, 2015
THE UNDERSIGNED HEREBY AGREE TO ALL OF THE TERMS AND CONDITIONS AS SET
FORTH IN THIS EQUIPMENT LEASE - PURCHASE AGREEMENT.
HOLMAN CAPITAL CORPORATION, Lessor CITY OF SANTA ANA, CA, Lessee
By: x
By: x
S. Holman Name: David Cavazos
;nt &CEO Title: City Manager
Counterpart No. of three manually executed and serially numbered counterparts. To the extent that
this Lease Agreement constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no
security or ownership interest herein may be created through the transfer or possession of any Counterpart
other than Counterpart No. 1.
City of Santa Ana / IIolman Capital Corporation
Equipment Lease- Purchase Agreement
WCSR 33973592v3
Page 11 of It
May 28, 2015
THE UNDERSIGNED HEREBY AGREE TO ALL OF T03 TE%NIS AND CONDITIONS AS SET
FORTH IN THIS EQUIPMENT LEAS&PURCHASE AGREEMENT.
HOLMAN CAPITAI, CORPORATION, Lessor CITY OF SANTA ANNA, CA, Lessee
By: x
Lance S. Holman
President & CEO
Fay: x
Name: David Cavazos
Title: City Manager
Counterpart No. of three manually executed and serially numbered counteiparts, To the extent that
this Lease Agreement constitutes chattel paper (as defined in the applicable Uniform Commercial Code),
no security or ownership interest herein may be created through the transfer or possession of any
Counterpart: other than Counterpart No. 1.
RECOWMENDED FOR APPROVAL:
CARLOSROJAS FCW -C�a+o
Chief of Police
(APPROVED; AS TO FORS %i
Laura A. Rossini
`)(.Assistant (City Attorney
City of Santa Ana / Holman Capital Corporation
Equipment Leaso- Purchase Agreement
WCSR 339735920
Page,, 11 of 11
May 28, 2013
iDAV:nt11
EQUIPMENT SCHEDULE TO EQUIPMENT LEASE - PURCHASE AGREEMENT
DATED JUNE 5, 2015
DESCRIPTION OF THE EQUIPMENT:
The "Equipment" is Lessee's pro rata portion and Cost Share of 800 MHz Countywide Coordinated
Communications System (the "System "), as more fully described in that certain Joint Agreement for the
Operation, Maintenance and Financial Management of the Orange County 800 Megahertz Countywide
Coordinated Communications System dated November 23, 2004, the Lessee, Orange County, CA, and
various other parties thereto, the Amendment to the foregoing dated as of May 5, 2015, and a Letter
Agreement dated February 20, 2014 between Orange County, CA and the Lessee (collectively, the
"Equipment Acquisition Contract "). The term "Contractor shall have it meaning as set forth in the
Equipment Acquisition Contract.
The Equipment and project to be performed under the Equipment Acquisition Contract will be financed
by this Equipment Schedule dated June 5, 2015 to that Equipment Lease - Purchase Agreement dated June
5, 2015 by and between Holman Capital Corporation and the City of Santa Ana, and such Equipment
shall, include, without limitation, the following:
Equipment Amount Location
Equipment
Installation/Programming $ 93,790.00 Various*
911 System Backbone
completed in FY 15 -16 $ 227,713.00 Various*
911 System Backbone
completed in FY 15 -16 $ 613,451.00 Various*
Contingency
$
15,000.00 Various*
Total Project Cost:
$
949,954.00
Documentation Fee
$
5,000.00
Total Equipment Cost:
$
954,954.00
2. EQUIPMENT LOCATION: *The total project will be a county -wide upgrade and installation of a
911 emergency system that will be paid for by each city, municipal corporation, and other bodies
corporate and politic in Orange County up to its pro rata share of the System; however, this Lease will
only finance Equipment that constitutes the Lessee's pro rata share of the System; however, that specific
Equipment and work may be installed at the Lessee's facilities, or such other locations in Orange County.
Specific locations for Equipment will be set forth on each Acceptance Certificate and/or Disbursement
Request, but will be limited to the foregoing locations, including 20 Civic Center Plaza, Santa Ana, CA
92702.
3. RENTAL PAYMENT SCHEDULE: The rental payments shall be made for the Equipment as follows:
PAST
DATE
TOTAL RENTAL
INTEREST
PRINCIPAL
PURCIIASE OPTION
NumBER
DUE
PAYMENrDuE
COMPONENT
COMPONENT
0
6/5/2015
1
8/13/2016
$
31,234.25
$
34,630.11
$
(3,395.86)
$
987,100.36
2
11/13/2016
$
31,234.25
$
7,187.62
$
24,046.63
$
962,332.33
3
2/13/2017
$
31,234.25
$
7,007.27
$
24,226.98
$
937,378.54
4
5/13/2017
$
31,234.25
$
6,825.57
$
24,408.68
$
912,237.60
5
8/13/2017
$
31,234.25
$
6,642.51
$
24,591.74
$
886,908.10
6
11/13/2017
$
31,234.25
$
6,458.07
$
24,776.18
$
861,388.64
7
2/13/2018
$
31,234.25
$
6,272.25
$
24,962.00
$
835,677.78
A -1
WCSR 339735920
8
5/13/2018
$
31,234.25
$
6,085.03
$
25,149.22
$
809,774,08
9
8/13/2018
$
31,234.25
$
5,896.41
$
25,337.84
$
783,676.11
10
it /13/2018
$
31,234.25
$
5,706.38
$
25,527.87
$
757,382.40
11
2/13/2019
$
31,234.25
$
5,514.92
$
25,719.33
$
730,891.49
12
5/13/2019
$
31,234.25
$
5,322.03
$
25,912.22
$
704,201.91
13
8/13/2019
$
31,234.25
$
5,127.68
$
26,106.57
$
677,312.14
14
11/13/2019
$
31,234.25
$
4,931.88
$
26,302.37
$
650,220.70
15
2/13/2020
$
31,234.25
$
4,734.62
$
26,499.63
$
622,926.08
16
5/13/2020
$
31,234.25
$
4,535.87
$
26,698.38
$
595,426.75
17
8/13/2020
$
31,234.25
$
4,335.63
$
26,898.62
$
567,721.17
18
11/13/2020
$
31,234.25
$
4,133.89
$
27,10036
$
539,807.80
19
2/13/2021
$
31,234.25
$
3,930.64
$
27,303.61
$
511,685.08
20
5/13/2021
$
31,234.25
$
3,725.86
$
27,508.39
$
483,351.44
21
8/13/2021
$
31,234.25
$
3,519.55
$
27,714.70
$
454,805.30
22
11/13/2021
$
31,234.25
$
3,311.69
$
27,92156
$
426,045.06
23
2/13/2022
$
31,234.25
$
3,102.27
$
28,131.98
$
397,069.12
24
5/13/2022
$
31,234.25
$
2,891.28
$
28,34197
$
367,875.86
25
8/13/2022
$
31,234.25
$
2,678.71
$
28,555.54
$
338,463.65
26
11/13/2022
$
31,234.25
$
2,464.54
$
28,769.71
$
308,830.85
27
2/13/2023
$
31,234.25
$
2,248.77
$
28,985.48
$
278,975.81
28
5/13/2023
$
31,234.25
$
2,031.38
$
29,20187
$
248,896.85
29
8/13/2023
$
31,234.25
$
1,812.36
$
29,421.89
$
218,592.31
30
11/13/2023
$
31,234.25
$
1,591.69
$
29,642.56
$
188,060.47
31
2/13/2024
$
31,234.25
$
1,369.37
$
29,864.88
$
157,299.64
32
5/13/2024
$
31,234.25
$
1,145.39
$
30,088.86
$
126,308.12
33
8/13/2024
$
31,234.25
$
919.72
$
30,314.53
$
95,084.15
34
11/13/2024
$
31,234.25
$
692.36
$
30,541.89
$
63,626.00
35
2/13/2025
$
31,234.25
$
463.30
$
30,770.95
$
31,931.93
36
5/13/2025
$
31,234.25
$
232.38
$
30 001.87
$
-
Grand Totals
$
1,124,433.00
$
169,479.00
$
954,954.00
' Assumes that all rental payments and additional rentals due on and prior to that date have been paid.
4. INTERESTRATE: 3.0000 %
5. COMMENCEMENT DATE: June 5, 2015
6. SCHEDULED LEASE TERM: 10 years
7. Lessee's Current Fiscal Year extends from July 1, 2014 to June 30, 2015.
8. The terms and provisions of the Equipment Lease - Purchase Agreement described above (other
than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are
hereby incorporated into this Schedule by reference and made a part hereof.
9. Lessee hereby represents, warrants, and covenants that (i) its representations, warranties, and
covenants set forth in the Equipment Lease - Purchase Agreement (particularly Paragraph 20 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 (if any) due under this Schedule
during Lessee's Current Fiscal Year, which ends on June 30, 2015.
10. Interest, if any, accruing from the Commencement Date to the actual date of funding shall be
retained by Lessor as additional consideration for entering into this Schedule No. 01.
[Remainder ofpage intentionally left blank]
A -2
WCSR 339735920
CITY OF SANTA ANA
as Lessee
By:
Name: David Cavazos
Title: City Manager
HOLMAN CAPITAL CORPORATION,
as L sor
S. Holman
it & CEO
Counterpart No. of three manually executed and serially numbered counterparts. To the extent that this Schedule constitutes
chattel paper (as defined in the applicable Uniform Commercial Code), no security or ownership interest herein may be created
through the transfer or possession of any Counterpart other than Counterpart No. 1.
[Signature Page to Exhibit A- Equipment Schedule]
A -3
WCSR 339735920
CITY OF SANTA ANA
as Lessee
/ � jp-j� �
By: /
Name: D vid Cavazos
Title: City Manager
HOLMAN CAPITAL CORPORATION,
as Lessor
By:
Name: Lance S. Holman
Title: President & CEO
Counterpart No. _ of three manually executed and serially numbered counterparts. To the extent that this Schedule
constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security or ownership interest herein may
be created through the transfer or possession of any Counterpart other than Counterpart No. 1.
[Signature Page to Exhibit A- Equipment Schedule]
A -3
WCSR 33973592v3
EXHIBIT B
NOTICE AND ACKNOWLEDGEMENT OF SALE OF RENTAL PAYMENTS AND
ASSIGNMENT OF LEASE AGREEMENT AND ESCROW AGREEMENT
Holman Capital Corporation ("Lessor") and the City of Santa Ana ("Lessee") have entered into
an Equipment Lease - Purchase Agreement and Equipment Schedule thereto both dated June 5, 2015 (the
"Lease Agreement "), under which Lessee has, or will have prior to its execution hereof, leased
equipment (the "Equipment ") described therein.
Lessee is hereby notified that Lessor has assigned its right, title, and interest in and to the Lease
Agreement, the leased Equipment, and the rental payments as permitted by the Lease Agreement.
Lessee is hereby directed to pay any and all rental payments and other amounts due under the
Lease Agreement to Community Business Bank, and/or its affiliates (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 serving requests to the
Assignee at the following address:
Community Business Bank
Attn: Dianne Bryant
1540 West Kettleman Lane, Suite A
Lodi, CA 95242
E -mail: dbryantAcommunitybizbank.com
With a copy to:
Community Business Bank
Attn: Chad Meyer, President
1550 Harbor Boulevard, Suite 200
West Sacramento, CA 95691
By signing this Notice and Acknowledgment, Lessee agrees that it will pay all amounts due
under the Lease Agreement 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 the Lease
Agreement, 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 Lease Agreement or made any warranties whatsoever as to the Lease
Agreement or the Equipment. Lessee agrees that no change may be made to the Lease Agreement
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: June 5, 2015 CITY OOt S A ANA, as Lessee
By: 1�
Name: David Cavaz
Title: City Manager
B -1
WCSR 339735920
Holman Capital Corporation
29883 Santa Margarita Parkway, Suite 100
Rancho Santa Margarita, CA 92688
EXHIBIT C -2
June 5, 2015
Re: Equipment Lease - Purchase Agreement dated June 5, 2015
In connection with the above - referenced Lease Agreement, City of Santa Ana, 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 SANTA ANA, as Lessee
By
Name: David Cavazos
Title: City Manager
C -2
WCSR 33973592v3
MA (OR
19LO a Pu ido
IMIVOR PRO : a'd
sal T n a3ero
COUNCIL NIErM8ERS
Anyeiica Aroezct.a
P. Dav c; Benavides
Michele Nlar!in;z
Roman Reyna
VLroanr F Sar miento
May 12, 2015
t
C11"t/ OF SANTA ANA
24? Cv;c Center Plaza • PO_ Sou 1988
Santa Ana, Califoi ma 92702
1V_11 .5aLSc= 843.23
Holman Capital Corporation
29883 Santa Margarita Parkway, Suite 100
Rancho Santa Margarita, CA 92688
Re: City of Santa Ana Insurance Program
Equipment Lease- Purchase Agreement dated May 22, 2015
To Whom It May Concern:
CCTV NIANAOER.
Ovid r vazos
C1 7 Y ATTORNEY
Jomq R. Ca,,J'll'4)
CLERK OF THE COUNCIL
Nlalia L'. Flu¢ar
The City of Santa Ana is a member of Big Independent Cities Excess Pool (SICEP). Current reinsurance
and excess municipal liability is insured from $1,000,000 to $27,000,000 and includes auto liability
coverage. The City self- insures and funds the first $1,000,000 of claim payments.
The City is permissively self - insured for workers' compensation and self - administers this program as
well. The City, through BICEP, purchases excess statutory coverage through the California State
Association of Counties — Excess Insurance Authority (CSAC -EIA) above $1,000,000. The City funds
claim payments under $1,000,000.
The City is also a member of the Public Entity Property Insurance Program (PEPIP). At present,
membership is over 6,400 entities. Current property insurance is $113 per occurrence for "All Risk"
coverage and flood coverage is $82,500,000 or $50,000,000 based on the Flood zone where our
insured property is located.
Inquiries concerning the City of Santa Ana's insurance program should be addressed to the
undersigned.
Sincerely, (�
dward S. Raya
Executive Director of Personnel Services /Risk Management
SAN'CAANA CITY COUNCIL
1> 'lin ...... ,, Ifilh A. r loon a 4 n3' ',
I! UV ? A! 1 6 wm I N " 1 N'I1
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ESSENTIAL USE CERTIFICATE
Holman Capital Corporation
29883 Santa Margarita Parkway, Suite 100
Rancho Santa Margarita, CA 92688
June 5, 2015
Re: Equipment Lease - Purchase Agreement dated June 5, 2015
I, David Cavazos, the City Manager of the City of Santa Ana, 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 Lease Agreement:
What is the specific use of the Equipment?
Financing of the Partnership Costs owed to the County of Orange would allow the City and its recently
purchased equipment to access the 800 MHz communication system and improve the reliability of
communication related to any public safety incidents within the county or in the event of a natural
disaster.
Equipment used under the 800 MHz system is used for radio communications by the Police and Fire
Agencies for emergency and non - emergency daily operations, special events, and inter - agency
communications during mutual aid situations and potentially catastrophic events. It provides the same
interoperable capabilities for Public Works and Lifeguard Agencies, as well. The use of the 800 MHz
Countywide Coordinated Communications System (CCCS) is achieved through a Partnership with
Orange County Police, Fire, Public Works and Lifeguard Agencies.
2. What increased capabilities will the Equipment provide?
The Orange County 800 MHz CCCS services communications and interoperability requirements
of all County and City Public Safety agencies in Orange County. The existing system is outdated,
and to extend the useful service life of the system a systematic replacement of critical
infrastructure and electric equipment is required. Replacement and/or upgrades to both hardware
and software will be required to maintain a state -of -the -art system and to extend the life of this
valuable infrastructure. The system will provide the same quality capabilities with Next
Generation technology that helps agencies provide for the safety and well -being of their
communities.
Why is the Equipment essential to your ability to deliver governmental services?
Financing of the Partnership Costs owed to the County of Orange would allow the City and its recently
purchased equipment to access the 800 MHz communication system and improve the reliability of
communication related to any public safety incidents within the county or in the event of a natural
disaster.
The 800 MHz CCCS provides critical interoperable communication needs for all Police, Fire, Public
Works and Lifeguard Agencies during normal operations, and in the event of a natural disaster.
Maintaining state -of -the -art radio communication technology is essential to the efforts of community
safety.
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WCSR 339735920
4. Does the Equipment replace existing equipment?
(If so, please explain why you are replacing the existing equipment)
Yes. Existing infrastructure of the 800 MHz CCCS has reached its end of life after 14 years, and requires
a systematic replacement of critical equipment to achieve P25 standards by 2018.
Why did you choose this specific Equipment?
Financing of the Partnership Costs owed to the County of Orange would allow the City and its recently
purchased equipment to access the 800 MHz communication system and improve the reliability of
communication related to any public safety incidents within the county or in the event of a natural
disaster.
800 MHz CCCS is utilized by all Orange County Police, Fire, Public Works and Lifeguard Agencies. It
provides for seamless interoperability experience between all agencies for the purposes of radio
communications under both emergency and non - emergency situations. This system is unique to public
safety, in that it allows for the use of "red channel' operations. This frequency is a one of a kind feature
of the system where police are able to coordinate during countywide emergency situations, such as;
pursuits crossing multi jurisdictions, emergency crime broadcasts, and major mutual aid incidents.
6. For how many years do you expect to utilize the Equipment?
The expected useful life of this system is ten to fifteen years.
Very truly yours,
CITY OF SANTA A, as Lessee
By:
Name: David Cavazos
Title: City Manager
[Signature Page to Essential Use Certificate]
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WCSR 339735920
EXHIBIT E
INCUMBENCY CERTIFICATE
I, Maria Huizar, do hereby certify that I am the Asst. Director of Finance of the City of Santa
Ana, a municipal corporation, which is a duly established and validly existing as a political subdivision
of the State of California under the Constitution and laws of the State of California, 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 Equipment Lease - Purchase Agreement and Equipment
Schedule both dated June 5, 2015 (the "Lease Agreement"), between the CITY OF
SANTA ANA and Holman Capital Corporation, as lessor, and
b. Enter into that certain Escrow dated June 5, 2015 (the "Escrow Agreement"),
between the CITY OF SANTA ANA, Community Business Bank, as escrow agent,
and Holman Capital Corporation, as lessor, and to execute various payment and
disbursement request forms,
c. Execute Certificates of Acceptance and other certificate, documents, and agreements
relating to the Lease Agreement and/or Escrow Agreement.
NAME TITLE SIGNATURE
David Cavazos City Manager
Francisco Gutierrez Executive Director of k � r A n
Finance Department
IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the City of Santa Ana,
California.
June 5, 2015
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WCSR 339735920
Maria Hulzar, City Cler
EXHIBIT F
OPINION OF LESSEE'S COUNSEL
June 5, 2015
Holman Capital Corporation
29883 Santa Margarita Parkway, Suite 100
Rancho Santa Margarita, CA 92688
Re: Equipment Lease - Purchase Agreement and Equipment Schedule both dated June 5, 2015
Ladies and Gentlemen:
As counsel to the CITY OF SANTA ANA (the "Lessee "), I have examined the Equipment
Lease - Purchase Agreement and Equipment Schedule both dated June 5, 2015 (collectively, the "Lease
Agreement"), between the Lessee and Holman Capital Corporation, as lessor ("Lessor"), the form of the
Escrow Agreement, together 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 Lease Agreement and the Escrow Agreement
and the investment of the lease proceeds into the Permitted Investment (as such term is defined in the
Escrow Agreement). The Lease Agreement 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 municipal corporation, which is a duly established and validly existing as a
political subdivision of the State of California under the Constitution and 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. The Permitted Investment has been duly authorized 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 beneficial use of the Equipment to be leased pursuant to the Lease Agreement, 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. The resolution adopted by the
Governing Body of the Lessee authorizing the execution and delivery of the Transaction Documents, the
investment of lease proceeds into the Escrow Account and Permitted Investments, and certain other
matters was adopted 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
WCSR 33973592v3 F -1
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 Lease Agreement. 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 beneficial use of 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.
This opinion may be relied upon by purchasers and assignees of Lessor's interests in the Lease
Agreement.
Respectfully submitted,
aura Rossini
Senior Assistant City Attorney
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WCSR 339735920
EXHIBIT G:
RESERVED.
G
WCSR 339735920
EXHIBIT H
POST- ISSUANCE TAX COMPLIANCE PROCEDURES
Dated: June 5, 2015
The following certificate is delivered in connection with the execution and delivery of the
Equipment Lease - Purchase Agreement dated June 5, 2015 (the "Lease Agreement "), entered into
between the City of Santa Ana (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 the Equipment Schedule executed under the Agreement
(together with all related documents executed pursuant thereto and contemporaneously herewith, the
"Financing Documents "). As described in the Financing Documents, Lessor shall apply $954,954.00 (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 resolution 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 the Equipment Schedule. The Principal Amount will be
deposited in escrow by Lessor on the date of issuance of the Financing Documents and held by Community
Business Bank, as escrow agent (the "Escrow Agent ") pending acquisition of the Equipment under the
terms of that certain Escrow Agreement dated as of June 5, 2015 (the "Escrow Agreement "), by and
between Lessor and Escrow Agent.
1.4 Lessee will timely file for each payment schedule issued under the Lease 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 NOT 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.
Section 2. Non- Arbitraee 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.
H -1
WCSR 339735920
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 Contractor 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) Lessee adopted a resolution or otherwise declared its official intent in accordance with Treasury
Regulation § 1.150 -2 (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 a Contractor under the Equipment Acquisition Contract 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;
(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 June 8, 2017, but not later than June 5, 2018.
II -2
WCSR 33973592v3
(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; and (iii) at least ninety -five percent (95 %) of
the Principal Amount is used for the governmental activities of Lessee..
Section 5. Escrow Account.
The Financing Documents provide that the monies deposited in escrow shall be invested until payments to
the Contractor 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
6.3, "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.
6.4. 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.
FI -3
WCSR 33973592v3
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.
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- 6000785.
8.5. The Lessee has adopted, or will adopt in a reasonable period post - closing, by resolution, separate
written procedures regarding ongoing compliance with federal tax requirements necessary to keep, ensure
and maintain the interest portions of the Rental Payments under the Lease Agreement as excluded from
Lessor's gross income for federal income tax purposes, and will, on an annual basis, conduct an audit of the
Lease Agreement to ensure compliance with such procedures
IN WITNESS WHEREOF, this Post - Issuance Tax Compliance Procedures Certificate has been
executed on behalf of Lessee as of June 5, 2015.
CITY OF SANTA ANA, CALIFORNIA
By:
�G�tQ� aC 5
Name: Francisco Gutierrez
Title: Ex. Director of Finance Department
H -4
WCSR 33973592v3
ESCROW AGREEMENT
LESSOR:
Holman Capital Corporation
29883 Santa Margarita Parkway
Suite 100
Rancho Santa Margarita, CA 92688
LESSEE:
City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92702
ESCROW AGENT:
Community Business Bank
1540 West Kettleman Lane, Suite A
Lodi, CA 95242
THIS ESCROW AGREEMENT (this "Escrow Agreement ") is made as of June 5, 2015,
between Holman Capital Corporation ("Lessor"), the City of Santa Ana ("Lessee"), and
Community Business Bank (the "Escrow Agent").
Lessor and Lessee have heretofore entered into that certain Equipment Lease - Purchase
Agreement and Equipment Schedule both dated June 5, 2015 (the "Lease Agreement "). The
Lease Agreement contemplates that certain Equipment described therein (the "Equipment ") is to
be acquired from Contractors under the Equipment Acquisition Agreement.
After acceptance of the Equipment by Lessee, the Equipment is to be leased by Lessor to
Lessee pursuant to the terms of the Lease Agreement.
The Lease Agreement contemplates that Lessor will deposit with the Escrow Agent cash
in the amount of $949,954.00 (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 Contractors
for the Equipment its invoice cost or pro rata portion thereof (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 in
Lessee's name for the benefit of Lessee and Lessor, and Lessee has granted to Lessor a first
priority and perfected 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 without the need for any additional 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:
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
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WCSR 339735920
Escrow Fund shall accrue to the benefit of Lessee and shall be applied as expressly set
forth herein.
To the limited extent required to perfect the first, priority security interest hereby 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 (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. Cash,
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 in an
Community Business Bank interest - bearing demand deposit account (as more particularly
described in Schedule B hereto, the "Permitted Investment'), or such other investments as
Escrow Agent may from time to time offer and Lessee may from time to time specify in
writing, to the extent the same are at the time legal for investment of the funds being
invested. Interest (if any) 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 Agreement 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 Contractor for the Equipment
payments then due and payable, or reimburse Lessee for amounts that it has paid
to the Contractor for 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 Contractor invoice(s) (or other evidence provided for in
the Equipment Acquisition Contract specifying the acquisition price of the
I -2
WCSR 33973592v3
Equipment described in the requisition request, and (c) any additional
documentation required by Lessor.
b. The Escrow Agent will not charge fees for the ordinary services it renders in
connection herewith.
C. 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 Lease
Agreement, the Escrow Agent shall thereupon promptly remit to Lessor the entire
balance of the Escrow Fund.
d. 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 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 Agreement, 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
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WCSR 339735920
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(c) or Section 5(d) 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.
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 ofpage intentionally left blank]
I -4
WCSR 339735920
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 SANTA
By: YZ By:
L . Holman
sident &CEO
ESCROW AGENT: COMMUNITY BUSINESS BANK
WCSR 339735920
David Cavazos
City Manager
Name: Dianne Bryant
Title: Senior Vice President /Credit Administrator
I -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 SANTA
By: By:
Lance S. Holman
President &CEO
ESCROW AGENT: COMMUNITY BUSINESS BANK
By:
WCSR 339735920
l
David (Cavazos
City Manager
Name: Dianne Bryant
Title: Senior Vice President/Credit Administrator
1 -5
APPROVED AS TO FORM
Laura A. Rossini
'--�c .Assistant City Attorney
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
In
Lance S. Holman
President &CEO
LESSEE: CITY OF SANTA
David Cavazos
City Manager
ESCROW AGENT: COMMUNITY BUSINESS BANK
By: V, , 6,
— —
Name: Dianne Bryant
Title: Senior Vice President/Credit Administrator
1 -5
WCSR 339735920
EXHIBIT A TO ESCROW AGREEMENT
CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST
The following payment request is directed to Community Business Bank (the "Escrow
Agent "), as escrow agent under that certain Escrow Agreement dated June 5, 2015 (the "Escrow
Agreement "), between the City of Santa Ana ( "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 Community Business Bank, all
references herein to "Lessor" shall mean Community Business 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 the Equipment Acquisition Contract (or has been paid
by and not previously reimbursed to Orange County or the Lessee). The equipment described
below is part or all of the Equipment leased pursuant to that certain Equipment Lease - Purchase
Agreement and Equipment Schedule both dated June 5, 2015 (the "Lease Agreement"), between
Lessor and Lessee:
Description of Equipment: The "Equipment" is Lessee's pro rata portion and Cost
Share of 800 MHz Countywide Coordinated Communications System (the "System "), as more
fully described in that certain Joint Agreement for the Operation, Maintenance and Financial
Management of the Orange County 800 Megahertz Countywide Coordinated Communications
System dated November 23, 2004, the Lessee, Orange County, CA, and various other parties
thereto, the Amendment to the foregoing dated as of May 5, 2015, and a Letter Agreement dated
February 20, 2014 between Orange County, CA and the Lessee (collectively, the "Equipment
Acquisition Contract ").
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 Lease Agreement; (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 Lease Agreement; (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 Lease Agreement; (vii) no Event
of Default or Event of Nonappropriation, as those terms are defined in the 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 Lease Agreement during Lessee's current Fiscal Year.
I -6
wCSR 339735920
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 Contractor or
Orange County, CA (as reimbursement for payments made to the Contractor) the amounts set
forth on the attached invoices or other evidence provided 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) or other evidence that payment is due and (b) other documents and evidence that
payment is required as Lessor may reasonably request.
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 Lease Agreement. By
checking the foregoing box, Lessee certifies and confirms that Lessor has performed all of its
obligations under the Lease Agreement.
Acceptance Date:
Approved:
COMMUNITY BUSINESS BANK, as Lessor CITY OF SANTA ANA, as Lessee
i
By: V By:
Name:-Dianne Bryant d Name:
Title: Senior Vice President Title:
Credit Administrator
I -7
WCSR 339735920
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 Contractor or
Orange County, CA (as reimbursement for payments made to the Contractor) the amounts set
forth on the attached invoices or other evidence provided 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) or other evidence that payment is due and (b) other documents and evidence that
payment is required as Lessor may reasonably request.
IF REQUEST IS FINAL REQUEST, CHECK HERE E]. 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 Lease Agreement. By
checking the foregoing box, Lessee certifies and confirms that Lessor has performed all of its
obligations under the Lease Agreement.
Acceptance Date:
Approved:
COMMUNITY BUSINESS BANK, as Lessor
By:
Name:
WCSR 339735920
CITY OF SANTA ANA, as Lessee
By:
Name: David Cavazos
Title: City Manager
I -7
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Holman Capital Corporation ( "Lessor "), City of Santa Ana ( "Lessee "), and Community Business
Bank ( "Escrow Agent ") have entered into an Escrow Agreement dated June 5, 2015 (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 Community Business 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: June 5, 2015
LESSOR: HOLMAN CAPITAL LESSEE: CITY OF SANTA ANA
By:
In
ESCROW AGENT: COMMUNITY BUSINESS BANK
am
David Cavazos
City Manager
Name: Dianne Bryant
Title: Senior Vice President/Credit Administrator
I -8
W CSR 33973592v3
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Holman Capital Corporation ( "Lessor "), City of Santa Ana ( "Lessee "), and Community Business
Bank ( "Escrow Agent ") have entered into an Escrow Agreement dated June 5, 2015 (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 Community Business 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: June 5, 2015
LESSOR: HOLMAN CAPITAL
CORPORATION
LESSEE: CITY OF SANTA ANA
By: By. I Dl% 6��
Lance S. Holman David Cavazos
President &CEO City Manager
ESCROW AGENT: COMMUNITY BUSINESS BANK
C
WCSR 33973592x3
Name: Dianne Bryant
Title: Senior Vice President/Credit Administrator
I -8
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Holman Capital Corporation ( "Lessor "), City of Santa Ana ( "Lessee "), and Community Business
Bank ( "Escrow Agent ") have entered into an Escrow Agreement dated June 5, 2015 (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 Community Business 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: June 5, 2015
LESSOR: HOLMAN CAPITAL
By:
CORPORATION
LESSEE: CITY OF SANTA ANA
By:
Lance S. Holman David Cavazos
President &CEO City Manager
ESCROW AGENT: COMMUNITY BUSINESS BANK
By:
t
Name: Dianne Bryant
Title: Senior Vice Presi ent /Credit Administrator
I -8
WCSR 33973592v3
SCHEDULE B TO ESCROW AGREEMENT:
DISCLOSURE AND AUTHORIZATION FOR PERMITTED INVESTMENT
COMMUNITY BUSINESS BANK INTEREST BEARING DEMAND DEPOSIT ACCOUNT
Client: City of Santa Ana
Lease Issuance: June 5, 2015
DISCLOSURE
The Community Business Bank Interest Bearing Demand Deposit Account (the "Permitted
Investment') is an interest bearing checking account exclusively for mutual customers of Holman
Capital Corporation and Community Business Bank. The Permitted Investment is not endorsed,
collateralized or guaranteed by, and does not constitute obligations of Community Business Bank
or its affiliates; however, the funds held in this account are considered insured deposits by the
FDIC. A copy of all accounts disclosures and/or a prospectus have been provided to the
undersigned Lessee. We hereby acknowledge receipt of the foregoing.
AUTHORIZATION
With respect to the above referenced Lease Issuance of the Lessee, Community Business Bank is
hereby authorized and directed to invest the Lease Proceeds in the Permitted Investment pending
additional investment directions and/or distribution instructions from the Lessee and/or Lessor,
subject to the express terms contained in the Escrow Agreement.
LESSEE
CITY OF SANTA ANA
f
By: I Date:
Name: David Cavazos
Title: City Manager
I -9
WCSR 33973592v3
Tab 12
LAR/05119/15
RESOLUTION NO. 2015-022
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA
AUTHORIZING THE CITY MANAGER OR EXECUTIVE DIRECTOR OF
FINANCE TO ENTER INTO A TEN YEAR FINANCING AGREEMENT WITH
HOLMAN CAPITAL CORPORATION FOR FINANCING OF THE CITY'S
PORTION OF THE 800 MHZ COUNTYWIDE COORDINATED
COMMUNICATIONS SYSTEM BACKBONE UPGRADE FOR P25
COMPLIANCE, EXECUTE AN ESCROW AGREEMENT, AND ANY
ASSURANCES AND /OR DOCUMENTS REQUIRED FOR SAID AGREEMENT
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
A. In 1995, a Joint Powers Authority was formed in Orange County to
collectively implement the 800 MHz Countywide Coordinated
Communications System.
B. In November 2001, the City of Santa Ana joined the 800 MHz
Countywide Coordinated Communications System. The system
allows all member agencies in Orange County to transmit on
multiple radio channels simultaneously during routine daily activities
and provides both tactical and dispatch channels; as well as the
ability to monitor and speak with all member agencies in the County
via a County -wide frequency (Red Channel).
C. The member cities' equipment and the system backbone have
reached the end of their useful life. In addition, the FCC is requiring
users to upgrade to a P25 compliant system. As a result, the 800
MHz Countywide Coordinated Communications System is
undergoing a comprehensive upgrade of the system and equipment
to modernize the system and to operate a system which will be P25
compliant.
D. The upgrade of the system and equipment will be completed by the
member agencies, including the City of Santa Ana, by the end of
fiscal year 2018.
E. The City of Santa Ana, in conjunction with the other member
agencies of the 800 MHz Countywide Coordinated Communication
System, has determined that there is a true and real need for the
Resolution No, 2015 -022
Page 1 of 4
upgrade of the system backbone so that the City of Santa Ana can
operate a P25 compliant 800 MHz system and have the capability
to monitor and talk with all other agencies in the County should
there be a natural disaster, terrorist event, or need for mutual aid.
F. The City of Santa Ana's share of the backbone and /or system
upgrade and cost for purchase of P25 compliant equipment was
estimated by the County of Orange (lead agency for the joint
powers agreement) to be $8,055,506.00 over the next three years.
G. Partnership costs, allocated by the total number of radios in each
agency's inventory as provided to the County, are distributed to all
law, fire, public works and lifeguard agencies that utilize the 800
MHz system. The 800 MHz radio infrastructure equipment that is at
or near its end of life will be replaced with a newer version.
Specifically, 565+ Quantar radio base stations countywide will be
replaced with new GTR8000 models that comply with the "Next
Generation" radio system. In addition, ancillary equipment at 25
radio sites will be replaced by fiscal year 2016 -17.
H. The City's costs (Partnership Costs), for participating in the Next
Generation systems, payable over the following three fiscal years
are as follows: FY 2015 -16 - $227,713; FY 2016 -17 - $613,451;
and FY 2017 -18 - $1,412,872, totaling $2,254,036. The financing
agreement with Holman Capital Corporation will provide the funding
necessary to fulfill the City's commitment for the first two years of
the 800 MHz backbone upgrade casts, along with the
programming, installation and contract contingency at an amount
not to exceed $1,125,086 (principal and interest costs).
The City of Santa Ana has determined that the financing agreement
with Holman Capital Corporation for the City's portion or
partnership costs of the 800 MHz Countywide Coordinated
Communication System backbone (i.e. "Next Generation" radio
system) upgrade is in the best interest of the City of Santa Ana.
Section 2. NOW THEREFORE, BE IT RESOLVED AND ORDERED that the
City Council of the City of Santa Ana does hereby authorize the City Manager or
Executive Director of Finance to enter into a ten (10) year financing agreement with
Holman Capital Corporation for the City's portion of the 800 MHz Countywide
Coordinated Communication System backbone system upgrade along with the
programming, installation and contract contingency; enter into an escrow agreement
with Holman Capital Corporation as part of the financing agreement through American
River Bank, and execute any documents and /or make any assurances that are
necessary for the execution of the agreements.
Resolution No. 2015 -022
Page 2 of 4
Section 3. If any surcharge or fee, section, subsection, sentence, clause,
phrase or word of this Resolution is for any reason held to be invalid by a court of
competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this Resolution. The City Council hereby declares that it would have passed
and adopted this Resolution, and each and all provisions hereof, irrespective of the fact
that one or more provisions may be declared invalid.
Section 4. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this 1gt" day of May, 2015.
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
Laura A. Rossini
Senior Assistant City Attorney
AYES: Counoilmembers: Amezcua, Benavides, Martinez Pulido, Reyna
Sarmiento. Tinaiero (7)
NOES: Councilmembers: None (0)
ABSTAIN: Councilmembers: None (0)
NOT PRESENT: Councilmembers: None (0)
Resolution No, 2015 -022
Page 3 of 4
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I' MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the
attached Resolution No. 2015 -022 to be the original resolution adopted by the City
Council of the City of Santa Ana on May 19, 2015. //11
Date: 67L i bo I S- �n l z- I'JV,2y
Clerk of the Council
City of Santa Ana
Resolution No. 2015 -022
Page 4 of 4
Tab 14
WOMBLE Pr
CARLYLE
SANDRIDGE
& RICE
A LIMITED LIABILITY
PARTNERSHIP
I50 Fayetteville Street
Suite 2100
Raleigh, NC 27601
Mailing Address:
Post Office Box 831
Raleigh, NC 27602
Telephone: (9 19) 755 -2100
Fax: (919) 755 -2150
NVWWwcsr.com
June 5, 2015
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ARTICLE NO. 9414 7266 9904 2023 8269 45
Internal Revenue Service
Ogden, Utah 84201
Edward J. Rojas
Attorney
Direct Dial: (919) 755 -2162
Direct Fax: (919) 755 -6179
E -mail: ERojasCdwcsr.com
Re: City of Santa Ana, California — Equipment Lease - Purchase Agreement
Dear Sir or Madam:
Enclosed please find IRS Form 8038 -G for filing in regard to the above - referenced matter.
Please do not hesitate to contact me if you have any questions.
Very truly yours,
WOMBLE CARLYLE SANDRIDGE & RICE
A Limited Liability Partnership
h t
Edward J. Rojas
Enclosures
CALIFORNIA / DELAWARE / GFORGt.A / MARYLAND / NORTH CAROLINA / SOUTH CAROLINA / VIRGINIA / WASHINGTON D.C.
Form $ ®S8 -G Information Return for Tax- Exempt Governmental Obligations
(Rev. September 2011) ►Under Internal Revenue Code section 149(e) OMB No. 1545 -0720
► See separate instructions.
Department of the Treasury Caution: If the Issue price is under $100,000, use Form 8038 -GC.
Internal Revenue Service
■T-M Reoortina Authoritv If Amended Return. check here ► n
1 Issuer's name
2 Issuer's employer identification number (Ell
City of Santa Ana -
95- 6000785
3a Name of person (other than issuer) with whom the IRS may communicate about This r e. ,,Yi (see instructions). r
,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)
Room /suite
5 Report number (For IRS Use Only)
20 Civic Center Plaza
3 ,;�.;�`�_.
6 City, town, or post office, state, and ZIP code
7 Date of issue
Santa Ana, CA 92702
June 5, 2015
5 Name of issue
9 CUSIP number
Equipment Lease - Purchase Agreement
N/A
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see
106 Telephone number of officer or other
instructions)
employee shown on 10a
Francisco Gutierrez, Exec. Director of Finance
714.6475422
(Phil/ TvDe of Issue (enter the issue price). See the instructions and attach schedule.
11
12
13
14
15
16
17
18
Education . . . . . . . . . . . . . . . . . . . . . . . .
Health and hospital . . . . . . . . . . . . . . . . . . . .
Transportation . . . . . . . . . . . . . . . . . . .
Public safety . . . . . . . . . . . . . . . . . . . . . . .
Environment (including sewage-bonds) . . . . . . . . . . . . . .
Housing . . . . . . . . . . . . . . . . . . . . . . . .
Utilities . . . . . . . . . . . . . . . . . . . . . . . .
Other. Describe ►
. . . . . .
. . . . . .
. . . . . .
. . . . . .
. . . . . .
. . . . . .
. . . . . .
11
12
954,954
00
13
24
14
954,954
00
15
Proceeds used for credit enhancement . . . . . . . . . . . . 2526
16
. 17
Proceeds allocated to reasonably required reserve or replacement fund . 26
18
27
19
20
If obligations are TANS or RANs, check only box 1�9a . . . . . . . . .
If obligations are BANS, check only box 19b . . . . . . . . . . . .
if obligations are in the form of a lease or installment sale, check box . . . .
. . . . ► ❑
. . . . ► ❑
. . . . ► ❑
d
28
Proceeds used to advance refund prior issues _. ._ -28
Description of Obligations. Complete for the entire issue for which
this form is being filed.
29
Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . .
_(a) Final maturity date
(b) Issue price
(c) Stated redemption
price at maturity
(d) Weighted
average maturity
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here)
(e) Yield
21
05/1312025
1 $ 954,954.00
NIA: Lease/IPAJ
10 years
1
3.0000
of Idond Issue
22
Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . .
.
22
954,954
00
23 Iss:e.pdce of entire issue (enter amount from line 21, column (b)) . . . . .
24
Prsaaeds used for bond issuance costs (including underwriters' discount) . 24 5,000
0025
Proceeds used for credit enhancement . . . . . . . . . . . . 2526
Proceeds allocated to reasonably required reserve or replacement fund . 26
[23
27
Proceeds used to currently refund prior issues . . . . . . . . . 27
28
Proceeds used to advance refund prior issues _. ._ -28
29
Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . .
.
5,000
00
30
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here)
30
949,954
00
Description of Refunded Bonds. Complete this part only for refunding bonds.
31
Enter the remaining weighted average maturity of the bonds to be currently refunded . . . .
► N/A years
32
Enter the remaining weighted average maturity of the bonds to be advance refunded _. . . .
P. years
33
Enter the last date on which the refunded bonds will be - called (MM /DD/YYYY) . . . . . .
►
34
Enter the dates) the refunded bonds were issued ► (MM/DDfyyy')
For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 637733
Form 8038 -G (Rev. 9-2011)
Form 8038 -G (Rev. 9 -2011)
35
Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35
NIA
36a
Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a
b
Enter the final maturity date of the GIC ►
c
Enter the name of the GIC provider Ill
37
Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . 37
38a
If this issue is a loan made from the proceeds of another tax - exempt issue, check box ► ❑ and enter the following information:
b
Enter the date of the master pool obligation ►
c
Enter the EIN of the issuer of the master pool obligation ►
d
Enter the name of the issuer of the master pool obligation ►
39
If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box . . .
. ► ❑
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 ►
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge
Signature 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
and process this return, to the person that eve aut orized above.
Consent / �(..�,b t.., y a , c ey, -,� /, / Francisco Gutierrez, Exec. Dir. of Finance
signature of'issuer s authonzed represen alive Date Type or print name and title
Paid Print /rype preparer's name Preparers signature I uate Check ❑ If r I w
Preparer self- employed
Use Only Firm's name ► Firm's FIN ►
Form if JO-U (Rev. 9 -2011)
A L Z FORM #35803 VERSION: 07/14
WALZ FPOM ._ U.S. PAT. NO. 5,501,393
CERTIFIED
MAILER® 1111' III "'I'I1111'IIII'1111111' III "111'1111 "'I'I'I "'111111111
Internal Revenue Service
Ogden, UT 84201
Label #1
1111'111 ^'I'1114'Illl'1111111 'III "111'1111 "'19'1 "'111111111
Internal Revenue Service
Ogden, UT 84201
Label #2
i
Edward J. Rojas
Womble Carlyle Sandridge & Rice, LLP
I Post Office Box 831
Label #3 1 Raleigh, NC 27602
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9414 7266 9904 2023 8269 45
TO: Internal Revenue Service
Ogden, UT 84201
SENDER: Edward J. Rojas
REFERENCE: Santa Ana 911 System
PS Form 3800, Janua 2005
RETURN Postage
RECEIPT Certified Fee
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Internal Revenue Service
I Ogden, UT 84201
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To:
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9414 7266 9904 2023 8269 i
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PS Form 3811, January 2005 Domestic Return Recelpt
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CLOSING MEMORANDUM
$954,954.00 LEASE OF 911 SYSTEM UPGRADES AND dNSTALLATIONS
PURSUANT TO THAT EQUIPMENT LEASE - PURCHASE AGREEMENT AND EQUIPMENT SCHEDULE THERETO
DATED JUNE 5, 2015
BETWEEN CITY OF SANTA ANA, AS LESSEE, AND
HOLMAN CAPITAL CORPORATION, AS LESSOR
Pre - Closine: Pre - Closing will be held at the Lessee's convenience, on or before June 5, 2015. All documents will
be executed and three (3) blue ink originals will be overnighted to Edward L Rojas, Esq., Womble Carlyle Sandridge
& Rice, LLP, 150 Fayetteville Street, Suite 2100, Raleigh, North Carolina 27601, for delivery no later than 9:00 am
on the morning of June 5, 2015 and held in trust until such time as the wires and original documents are released
by the Parties.
Closine: (1) By internal funds transfer and pending receipt of original, executed Lease Documents, on the morning
of June 5, 2015, the Investor is authorized by Lessee to transfer via internal credit the Total Equipment Cost (as
defined below) to Escrow Agent, pursuant to a general ledger credit to the Escrow Account as follows:
Bank Name: Community Business Bank
ABA Number: 121144191
Account Number: 201009909
Account Name: City of Santa Ana
(2) By internal funds transfer and pending receipt of original, executed Lease Documents, on the morning of
June 5, 2015, the Investor is authorized by Lessee to transfer via internal credit the Issuance Costs (as defined
below) to Lessor, pursuant to a general ledger credit to the Lessor as follows:
Bank Name: Community Business Bank
ABA Number: 121144191
Account Number: 201008281
Account Name: Holman Capital Corporation
Counsel for each of the Parties will confirm by e -mail receipt of funds and then the release of all original documents
held in trust, when such funds and/or documents are in the possession of each of the Parties. 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.
Sources and Uses of Funds:
Principal Amount of Lease $ 954,954.00
TOTAL SOURCES $ 954,954.00
Total Equipment Cost: $ 949,954.00
Issuance Costs: $ 5,000.00
TOTAL LEASE PROCEEDS $ 954,954.00
Attest:
CITY OF SANTA ANA
By: � p
Name: David Cavazos
Title: City Manager
WCSR 33973592v3
ASSIGNMENT AGREEMENT
between the
HOLMAN CAPITAL CORPORATION
and
COMMUNITY BUSINESS BANK
Dated .Tune 5, 2015
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated June 5, 2015 (the "Assignment Agreement"), is 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 Community Business Bank, and affiliates (the
"Investor ");
WITNESSETH:
WHEREAS, the Corporation and the City of Santa Ana, California (the "City ") have executed
and entered into that certain Equipment Lease - Purchase Agreement dated June 5, 2015 and an Equipment
Schedule thereto of even date therewith (collectively, the "Lease "), whereby the Corporation has agreed
to lease to the City 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 "). Capitalized terms used without definition herein shall be given their
meaning as set forth in the Lease;
WHEREAS, the Corporation, the City, and Community Business Bank (the "Escrow Agent ")
have executed and entered into that certain Escrow Agreement dated June 5, 2015, which shall hold the
Lease Proceeds (as defined below) in trust for the benefit of the Corporation and City, subject to a lien in
favor of the Corporation;
WHEREAS, under and pursuant to the Lease, the City 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 City under and pursuant to the Lease to the Investor;
WHEREAS, in consideration of such assignment, the Investor shall deliver $949,954.00 ( "Lease
Proceeds") to into an escrow account created for the benefit of the City and the Corporation in satisfaction
of the Corporation's obligations under the Lease (the "Escrow Fund "), and $18,014.48 to the Corporation
in accordance with the wire instructions in the Closing Memorandum and /or invoices attached thereto on
June 5, 2015 (the "Closing Date "); 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 documents, attachment, and exhibits thereto, including, without
limitation:
(1) the Corporation's right to receive and collect all of the Rental Payments and
other amounts due from the City under the Lease;
(2) the Corporation's right to take all actions and give all consents under the Lease;
and the Corporation's 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 City 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 City 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 or attached to the documents 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 Corporation's security interest and other rights in 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, subject to the
terms and conditions of this Assignment Agreement. 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
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 all proceeds thereof as collateral security for all obligations of the
Corporation hereunder and all obligations of the City 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, as of the
Closing Date:
(1) 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;
(2) 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 trustee or holder of any indebtedness
or obligations of the Corporation or such required approvals and consents have
heretofore been duly obtained;
(3) the execution, delivery and performance of the Lease, the Escrow Agreement
and this Assignment Agreement by the Corporation 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 Assignor is a party or by which it or its property is bound;
(4) the Corporation has good title to the Lease and the Escrow Agreement and good
right to sell and transfer the same;
(5) the Lease is a legal, valid and binding obligation of the Corporation, as Lessor, in
connection with the financing of the Equipment in the ordinary course of business, enforceable
in accordance with their terms, subject only to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the rights of creditors generally and
subject to the availability of equitable remedies;
(6) assuming due authorization and truthfulness of the representations and warranties
of the City, the Lease, to the best of the knowledge of the Corporation, is a legal, valid and
binding obligation of the City, as Lessee, in connection with the financing of the Equipment in
the ordinary course of business, enforceable in accordance with their terms, subject only to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the
rights of creditors generally and subject to the availability of equitable remedies;
(6) true and complete copies of the Lease, Escrow Agreement, and all documents,
attachment, and exhibits thereto have been delivered to the Investor and contain or describe the
entire agreement acid all material documents made or given in connection with the Lease
Documents, and no representations or inducements not contained therein have been made or
given by the Corporation;
(7) the original counterpart of the Lease constituting chattel paper is in the
possession of the Corporation or its legal counsel and will be delivered to the Investor
following Closing. There are no other executed counterparts thereof, and, by virtue of the
Corporation's agreement to deliver the Lease to the Investor on a post- closing basis, the
Investor will have obtained title to the Lease, Escrow Agreement and Escrow Fund at the
Closing Date;
(8) the Lease, Escrow Fund and the Equipment are free of any liens, claims,
encumbrances, defenses, offsets and counterclaims, real or claimed arising by, through or
under the Corporation, except for the security interest in the Equipment created by the Lease
itself and security interest in the Escrow Fund created by the Escrow Agreement;
(9) all statements of fact and unpaid balances shown in the Lease and Escrow
Agreement are true and correct;
(10) the Lease, Escrow Agreement, and this Assignment Agreement are in full force
and effect;
(11) to the best of the Corporation's knowledge, the Corporation has complied,
and the Lease complies, with all applicable Federal, State and municipal laws, rules or
regulations having the force of law regarding leases;
(12) the City has no right to prepay the Rental Payments except as expressly provided
in the Lease;
(13) upon execution and delivery of this Assignment Agreement and, if applicable,
any UCC -I financing statement (and the due and timely filing thereof at the sole cost and
expense of the Investor), the Investor will have free and unencumbered title to the Lease and
the Escrow Agreement and a valid and enforceable first priority security interest in the
Equipment and the Escrow Fund,
(14) the Assigned Property has not been and will not be pledged, assigned or
otherwise encumbered by the Corporation to any person other than the Investor;
(15) 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;
(16) the Investor may, in the name of the Corporation, endorse any Rental Payments
or other remittances received with respect to the Lease or Escrow Agreement;
(17) to the best of the Corporation's knowledge, there is no dispute between the
City and any vendor of Equipment relating to the performance of such vendor under its
contract to manufacture, deliver or furnish Equipment;
(18) the City has not failed to accept, or failed to provide a certificate of acceptance
with respect to, any Equipment delivered to it and either paid for or reimbursed from Lease
Proceeds in the Escrow Fund;
(19) the City has not asserted any set -off, counterclaim or defense with respect to its
obligations owed to the Corporation to perform in accordance with the terms of the Lease,
and
(20) 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 City or the Corporation.
Section 4. Covenants.
(A) Nonimpairment of Lease. The Corporation agrees that it (1) shall not have any right
to amend, modify, compromise, release, enforce, terminate or permit prepayment of the Lease or 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) 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.
Section 9. Indemnification. If the Corporation breaches any of the representations,
warranties and agreements herein contained and 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 attorneys' fees and the expenses of collection, repossession, transportation, storage and
insurance in enforcing its rights under the Lease or hereunder, but excluding incidental or
consequential damages so long as the breach does not involve the gross negligence or willful
misconduct of the Corporation) 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 bear interest at the rate
of 18% per annum, but only to the extent permitted by law.
Section 10. Entire Agreement. This Assignment Agreement constitutes the entire agreement
between the parties hereto with respect to the purchase and sale of the Assigned Property and supersedes
any other agreements, negotiations, communications, understandings and commitments whether written
or oral, relating thereto This Agreement may be modified only by a writing signed by both the
Corporation and the Investor.
Section 11. Enforcement Costs. In the event of any action or proceeding that involves the
rights or obligations of the Corporation or the Investor under this Assignment Agreement, the prevailing
party shall be entitled to reimbursement from the other party of all costs and expenses associated with
said action or proceeding, including reasonable attorney's fees and litigation expenses. IN ANY
ACTION PENDING BEFORE ANY COURT OF ANY JURISDICTION, CORPORATION AND
INVESTOR EACH WAIVE ANY RIGHT IT MAY HAVE TO A JURY TRIAL.
[Signature Pages to Follow]
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.
COMMUNITY BUSINESS BANK
Investor
HOLMAN CAPITAL CORPORATION
Corporation
By: By:
Name: Dianne Bryant Lance S. Holman
Title: Senior Vice President /Credit Administrator 'Tit e: President & CEO
IN WITNESS WHEREOF, the parties hereto have executed and entered into this Assignment Agreement
by their officers thereunto drily authorized as of the day and year first referenced above.
COMMUNITY BUSINESS BANK
Investor
HOLMAN CAPITAL CORPORATION
Corporation
By: �1— / By:
Name: Dianne Bryant Name: Lance S. Holman
Title: Senior Vice Presidentl r dit Administrator Title: President & CEO
SCHEDULE A
ASSIGNMENT FROM: Holman Capital Corporation
TO: Community Business Bank
The Lease Documents covered by the annexed Assignment covering the Lease transaction with the City
of Santa, Ana, California (without limitation) the following:
Equipment Lease- Purchase Agreement dated June 5, 2015, between the City of Santa Ana,
California and Holman Capital Corporation;
Equipment Schedule (including the Payment Schedule attached therein) dated June 5, 2015 to
the Equipment Lease - Purchase Agreement, between the City of Santa Ana, California and
Holman Capital Corporation; and
Escrow Agreement dated June 5, 2015, between the City of Santa Ana, California and
Community Business Bank, together with any original Certificates of Acceptance and Payment
Request Forms delivered in connection therewith as of the date of the Assignment Agreement.