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Tab 1:
INDEX TO LEGAL DOCUMENTS
NON -BANK -QUALIFIED, APPROPRIATION -BASED, ESCROW FUNDED
TAX-EXEMPT EQUIPMENT LEASE -PURCHASE AGREEMENT
DATED JUNE 15, 2017 BY AND BETWEEN
HOLMAN CAPITAL CORPORATION
And
CITY OF SANTA ANA
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Tab 3:
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Tab 10:
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Tab 12:
Tab 13:
A-2017-143
Equipment Lease -Purchase Agreement;
Exhibit A — Equipment Schedule;
Exhibit B — Notice and Acknowledgment of Assignment;
Exhibit C-1 — Insurance Coverage Request;
Exhibit C-2 — Self -Insurance Rider (if applicable);
Exhibit D — Essential Use Certificate;
Exhibit E — Incumbency Certificate;
Exhibit F — Opinion of Lessee's Counsel;
Exhibit G — Intentionally Omitted;
Exhibit H — Post Issuance Tax Compliance Procedures
Exhibit I — Escrow Agreement
Resolution of Lessee;
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.
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HOLMAN CAPITAL CORPORATION
EQUIPMENT LEASE -PURCHASE AGREEMENT
1. Agreement. Subject to the terms and conditions contained in this Equipment Lease -Purchase
Agreement dated June 15, 2017 (this "Lease Agreement"), HOLMAN CAPITAL CORPORATION, as lessor
("Lessor"), whose mailing address is 25201 Paseo de Alicia, Suite 290, Laguna Hills, CA 92653, 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
Santa Cruz County Bank, as escrow agent, relating to the escrow fund (an "Escrow Fund") created
thereunder. On the Commencement Date, Lessor shall deposit: $1,462,000.00 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 ($1,457,000.00) 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, 2016; (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 allEvent of Nonappropriation hereunder shall occur, Lessee agrees to comply
City of Santa Ana / Holman Capital Corporation Page 1 of 11
Equipment Lease -Purchase Agreement % June 15, 2017
with the provisions of Section 16(c) and (d), if and as applicable, on or before the effective date of
termination.
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 histall, 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
City of Santa Ana. / Holman Capital Corporation 'Page 2 of 11
Equipment Lease -Purchase Agreement June 15, 2017
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 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 shalt 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,
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Equipment Lease-Pncchase Agreement June 15, 2017
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 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) oris 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
City of Santa Ana/ Hohn an Capital Corporation Page 4 of 11
Equipment Lease-Purohase Agreement June 15, 2017
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.
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 heretmder, 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
City of Santa Ana I PIolman Capital Corporation Page 5 of 1 I
Equipment Lease -Purchase Agreement June 15, 2017
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,
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
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Equipment Lease -Purchase Agreement June 15, 2017
been made to be immediately due and payable, (ii) shall be entitled to bring such action at law or in equity
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.
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Equipment Lease -Purchase Agreement June 15, 2017
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 Page 8 of 1 I
Equipment Lease -Purchase Agreement .Tune 15, 2017
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.
a) 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.
(in) 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 F 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, 2016.
(p) Lessee acktiowledges 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
obtained financial, legal, tax, accounting and other advice (including as it relates to structure, timing, terms
City of Santa Ana/ Holmen Capital Corporation Page 9 of 11
Equipment Lease -Purchase Agreement June 15, 2017
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. I 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 parry hereunder shall be deemed given when
mailed to that parry 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/Holm an Capital Corporation Page to of 1 I
Equipment Lease -Purchase Agreement June 15, 2017
THE UNDERSIGNED HEREBY AGREE TO ALL OF THE TERMS AND CONDITIONS AS SET
FORTH IN THIS EQUIPMENT LEASE -PURCHASE AGREEMENT.
HOLMAN CAPITAL CORPORATION, Lessor
By: x
Holman
& CEO
CITY OF SANTA ANA, CA, Lessee
By: x
Name: Cynthia Kurtz
Title: Interim City Manager
Counterpart No. of two 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/ Holman Capital Corporation Page 11 of 11
Equipment Lease -Purchase Agreement June 15, 2017
THE UNDERSIGNED HEREBY AGREE TO ALL OF THE TERMS AND CONDITIONS AS SET
FORTH IN THIS EQUIPMENT LEASE -PURCHASE AGREEMENT.
HOLMAN CAPITAL CORPORATION, Lessor
By: x
Lance S. Holman
President & CEO
CITY OF SANTA ANA, CA, Lessee
By: x ` f
N : Cynthia I tz
Title: Interim ity Manager
Counterpart No. of two 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.
APPROVED AS TO FORM:
SONIA R. CARVALHO
ity Attorney
amara ogosian
Assistant City Attorney
City of Santa Ana / Holman Capital Corporation Page 11 of 11
Equipment Lease -Purchase Agreement June 15, 2017
ATTEST:
MARIA D. HUIZAR
Clerk of the Council
RECOMMENDED FOR APPROVAL:
0 J MESSCHNABL
Acting Chief of Police
EXHIBIT A
EQUIPMENT SCHEDULE TO EQUIPMENT LEASE -PURCHASE AGREEMENT
DATED JUNE 15, 2017
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 15, 2017 to that Equipment Lease -Purchase Agreement dated
June 15, 2017 by and between Holman Capital Corporation and the City of Santa Ana, and such Equipment
shall, include, without limitation, the following:
Description
DALE
Total Cost
%of Total
City's Pro Rata Share of 911 System
Contingencies
$
$
1,411,978.00
45,022.00
96.58%
3.08%
Total Project Cost
H HCC Documentation Fee
$
$
1,457,000.00
5,000.00
99.66%
0.34%
Net Financing Amount
$
1,462,000.00
100.00%
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 maybe 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.
The following schedule is subject to change upon a change in the Maximum Federal Corporate Tax Rate
(as hereinafter defined).
PAYMENT
DALE
NUMBER
DUE
0
06/15/201.7
1
08/1.3/2017
2
11/13/2017
3
02/13/2018
4
05/13/2018
5
08/13/2018
6
11/13/2018
7
02/13/2019
8
05/13/2019
9
08/13/2019
10
11/13/2019
11
02/13/2020
12
05/13/2020
1.3
08/13/2020
14
11/13/2020
TOTAL RENTAL
INTEREST
PRINCIPAL
PAYMENT DUE
COMPONENT
COMPONENT
PURCHASE OFLION
F 51,625.47
$
7,427.77
$
44,197.70
$
1,460,336.37
$ 51,625.47
$
10,987.97
$
40,637.50
$
1,418,479.74
$ 51,625.47
$
10,673.03
$
40,952.44
$
1,376,298.73
$ 51,625.47
$
10,355.65
$
41,269.82
$
1,333,790.82
F 51,625.47
$
10,035.80
$
41,589.67
$
1,290,953.46
$ 51,625.47
$
9,713.48
$
41,911.99
$
1,247,784.11
5 51,625.47
$
9,388.67
$
42,236.80
$
1,204,280.20
6 51,625.47
$
9,061.33
$
42,564.14
$
1,160,439.14
6 51,625.47
$
8,731.46
$
42,894.01
$
1,116,258.31
6 51,625.47
$
8,399.03
$
43,226.44
$
1,071,735.07
6 51,625.47
$
8,064.03
$
43,561.44
$
1,026,866.79
6 51,625.47
$
7,726.42
$
43,899.05
$
981,650.77
8 51,625.47
$
7,386.21
$
44,239.26
$
936,084.33
51,625.47
$
7,043.35
$
44,582.12
$
890,164.75
A-1
15 02/13/2021
$
51,625.47
$
6,697.84
$
44,927.63
$
843,889.29
16 05/13/2021
$
51,625.47
$
6,349.65
$
45,275.82
$
797,255.20
17 08/13/2021
$
51,625.47
$
5,998.76
$
45,626.71
$
750,259.68
18 11/13/2021
$
51,625.47
$
5,645.16
$
45,980.31
$
702,899.96
19 02/13/2022
$
51,625.47
$
5,288.81
$
46,336.66
$
655,173.20
20 05/13/2022
$
51,625.47
$
4,929.70
$
46,695.77
$
607,076.56
21 08/13/2022
$
51,625.47
$
4,567.81
$
47,057.66
$
558,607.17
22 11/13/2022
$
51,625.47
$
4,203.11
$
47,422.36
$
509,762.14
23 02/13/2023
$
51,625.47
$
3,835.59
$
47,789.88
$
460,538.56
24 05/13/2023
$
51,625.47
$
3,465.22
$
48,160.25
$
410,933.51
25 08/13/2023
$
51,625.47
$
3,091.98
$
48,533.49
$
360,944.01
26 11/13/2023
$
51,625.47
$
2,715.84
$
48,909.63
$
310,567.09
27 02/13/2024
$
51,625.47
$
2,336.79
$
49,288.68
$
259,799.75
28 05/13/2024
$
51,625.47
$
1,954.80
$
49,670.67
$
208,638.96
29 08/13/2024
$
51,625.47
$
1,569.86
$
50,055.61
$
157,081.68
30 11/13/2024
$
51,625.47
$
1,181.93
$
50,443.54
$
105,124.84
31 02/13/2025
$
51,625.47
$
790.99
$
50,834.48
$
52,765.32
32 05/13/2025
$
51.625.47
$
397.00
.R
51.92R.47
S
'Assumes that all rental payments and additional rentals due on and prior to that date have been paid.
INTEREST RATE: 3.1000 % multiplied by the Margin Rate Factor.
"Margin Rate Factor" means the greater of (i) 1.0 and (ii) product of (a) one minus the Maximum
Federal Corporate Tax Rate newly in effect multiplied by (b) one divided by the sum of one minus the
Maximum Federal Corporate Tax Rate as of the Commencement Date (which for the avoidance of doubt
equals 1.53846). The effective date of any change in the Margin Rate Factor shall be the effective date of
the decrease or increase (as applicable) in the Maximum Federal Corporate Tax Rate resulting in such
change.
"Maximum Federal Corporate Tax Rate" means the maximum rate of income taxation imposed
on corporations pursuant to Section I I(b) of the Code, as in effect from time to time (or, if as a result of a
change in the Code, the rate of income taxation imposed on corporations generally shall not be applicable
to the Bank, the maximum statutory rate of federal income taxation which could apply to the Bank).
5. COMMENCEMENT DATE: June 15, 2017
6. SCHEDULED LEASE TERM: 8 years
7. Lessee's Current Fiscal Year extends from July 1, 2016 to June 30, 2017.
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 tinder this Schedule during
Lessee's Current Fiscal Year, which ends on June 30, 2016.
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 of page intentionally left blank]
CITY OF SANTA ANA
as Lessees
By: �—
Name: CriartzTitle: Inty nager
HOLMAN CAPITAL CORPORATION,
as Lessor
By:
Name: Lance S. Holman
Title: President & CEO
Counterpart No. of two manually executed and serially numbered counterparts. To the extent that
this Schedule constitutes chattel paper (as defined in the applicable 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
CITY OF SANTA ANA HOLMAN CAPITAL CORPORATION,
as Lessee as Lessor
By: B
Name: Cynthia Kurtz �a e: ce S. Holman
Title: Interim City Manager Tit sident & CEO
Counterpart No. of two manually executed and serially numbered counterparts. To the extent that
this Schedule constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security
or ownership interest herein may be created through the transfer or possession of any Counterpart other
than Cowiterpart No. 1.
[Signature Page to Exhibit A- Equipment Schedule]
A-3
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 15, 2017 (the
"Lease Agreement"), tinder 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 Santa Cruz County 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:
Santa Cruz County Bank
Attn: Shawn Lipman
720 Front Street, Suite 220
Santa Cruz, CA 95060
E-mail: slipman@sccountybank.com
With a copy to:
Santa Cruz County Bank
Attn: Loan Servicing
P.O. Box 8426
Santa Cruz, CA 95061
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.
W
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 15, 2017 CITY OF SANTA ANA, as Lessee
By: ,
Name: 2tenm hia Kurtz
Title: City Man 'ger
C
Holman Capital Corporation
25201 Paseo de Alicia, Suite 290
Laguna Hills, CA 92653
EXHIBIT C-1
INSURANCE CERTIFICATION
June 15, 2017
Re: Equipment Lease -Purchase Agreement dated June 15, 2017
In connection with the above -referenced Lease Agreement, City of Santa Ana, as lessee (the
"Lessee ") certifies that it has instructed the insurance agent named below (please fill in name, address, and
telephone number):
Name of Agent: Big Independent Cities Excess Pool
Address: 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833
Phone: 800-541-4591
to issue:
Liability Insurance. Lessee is required to maintain public liability insurance,
personal injury and property damage with policy limits of $5,000,000. The policy
X should be endorsed to name Santa Cruz County Bank (the assignee of Holman Capital
Corporation) as an additional insured.
Casualty Insurance. Lessee is required to maintain all risk extended coverage,
malicious mischief and vandalism insurance for the Equipment described in the
X above -referenced Equipment Schedule in an amount not less than the greater of
$1,462.000.00 or the full replacement cost of the Equipment. Such insurance shall
be endorsed to name Santa Cruz County Bank as a lender loss payee with respect to
such Equipment.
The required insurance should also be endorsed to give Santa Cruz County Bank at least 30 days
prior written notice of the effective date of any material alteration or cancellation of coverage, and an
endorsement confirming that the interest of Santa Cruz County Bank shall not be invalidated by any actions,
inactions, breach of warranty or conditions or negligence of Lessee.
Proof of insurance coverage will be provided to Santa Cruz County Bank prior to and/or
commensurate with the Commencement Date of the Lease.
Very truly yours,
CITY OF SANTA ANA, as Lessee
By: it � X
Namts WthiaKurtz 6
Title: Interim City Manager
C-1
'A R " EVIDENCE OF PROPERTY INSURANCE
DATE IVYYY)
MM/D
ISSUE06/0
I
/201
06/08/2017
THIS EVIDENCE OF PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE
ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE
COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN
THE ISSUING INSURERS) AUTHORIZED REPRESENTATIVE OR PRODUCER AND THE ADDITIONAL INTEREST.
PRODUCER
COMPANY
ALLIANT INSURANCE SERVICES, INC.
$50,000,000
P.O. BOX 6450
VARIOUS PER ATTACHED SCHEDULE 03
NEWPORT BEACH, CA 92658-6450
PH (949)756-0271 / FAX (949)756-2713
$92,500,000
LICENSE NO. OC36861
REPAIR OR REPLACEMENT COST VALUATION SUBJECT TO POLICY PROVISIONS
CODE SUB -CODE
ADDITIONAL INTEREST
INSUR�� _�.��
ALLIANT PROPERTY INSURANCE PROGRAM (APIP) MEMBER:
LOAN NUMBER
PRI MARY LAVER POLICY NUMBER
CITY OF SANTA ANA
$100,000,000
17471589/03-03
ATTN: ED RAYA
P.O. BOX 1988
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS
EFFECTIVE DATE (MM/DO/YY) EXPIRATION DATE (MM/DD/YY)
CONT. UNTIL
SANTA ANA, CA 92702-1988
07/01/16 07/01/17
TERMINATED
EERED
_
THIS REPLACES PRIOR EVIDENCE DATED:
AS RESPECTS EQUIPMENT LEASE -PURCHASE AGREEMENT DATED JUNE 15, 2017 BY AND BETWEEN HOLMAN CAPITAL CORPORATION
AND THE CITY OF SANTA ANA FOR 911 SYSTEM. TOTAL EQUIPMENT VALUED AT $1,462,000.00. SANTA CRUZ COUNTY BANK AND/OR ITS
ASSIGNS IS NAMED AS LOSS PAYEE
_ _____ �OVEBAGE1EF811.$.LF.ORMS.,_._._-
AMOI NT DF NaLRAN&,
$1,000,000,000
DEO CTIBLF
SEE
ALL RISK OF DIRECT PHYSICAL LOSS OR DAMAGE EXCLUDING EARTHQUAKE INCLUDING FLOOD
PER SCHEDULE ON FILE WITH COMPANY. COVERAGE INCLUDES REALAND PERSONAL
LOSS LIMIT PER
OCCURRENCE
BELOW
PROPERTY, RENTAL INCOME INCLUDING BOND REVENUE REQUIREMENTS, BUSINESS
FLOOD
BOILER & MACHINERY:
INTERRUPTION, EXTRA EXPENSE AND ALL EXTENSIONS AND SUBLIMITS OF COVERAGE AS
$50,000,000
SHOWN ON MANUSCRIPT POLICY FORM.
PER OCCURRENCE AND ANNUAL
AGGREGATE FLOOD ZONES A&V
CANCELLATION
$92,500,000
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
REPAIR OR REPLACEMENT COST VALUATION SUBJECT TO POLICY PROVISIONS
ALL OTHER FLOOD ZONES
ADDITIONAL INTEREST
VEHICLES IF PURCHASED ARE SUBJECT TO ACTUAL CASH VALUE (ACV) OR REPLACEMENT
BOILER & MACHINERY
NATURE OF INTEREST
COST PER POLICY PROVISIONS
$100,000,000
MORTGAGEE ADDITIONAL INSURED
THE LI
POCIES OF INSURANCE LISTED ABOVE HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS
SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS,
SUBJECT TO 10 DAYS NOTICE OF CANCELLATION FOR NON-PAYMENT OF PREMIUM.
ALL RISK: $5,000 DECLARED REDEVELOPMENT PROPERTIES
$25,000 COMPREHENSIVE AND COLLISIONEXCEPT
$10,000 ALL OTHER
I $50,000 FIRE TRUCKS
FLOOD: $250,000 FLOOD ZONES A &V
OTHER:
$100,000 ALL OTHER FLOOD ZONES
�i $10,000 CONTRACTOR EQUIPMENT
BOILER & MACHINERY:
I EHPERRDED APPLY BASED ON SPECIFIC
HIGHER/PERIL
OBJECT/
CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
ACCORDANCE WITH THE POLICY PROVISIONS.
ADDITIONAL INTEREST
NAME AND ADDRESS
NATURE OF INTEREST
MORTGAGEE ADDITIONAL INSURED
SANTA CRUZ COUNTY BANK
ATTN: SHAWN LIPMAN
720 FRONT STREET, STE. 220
SANTA CRUZ, CA 96060
X i LENDER'S LOSS PAYABLE I I (OTHER)
LENDER'S LOSS PAYABLE ENDORSEMENT
I. Loss or damage, if any, under this policy, shall be paid to the Payee named on the first page of this policy, its successors and assigns,
hereinafter referred to as "the Lender", in whatever form or capacity its interests may appear and whether said interest be vested in said
Lender in its individual or in its disclosed or undisclosed fiduciary or representative capacity, or otherwise, or vested in a nominee or trustee
of said Lender.
2. The insurance under this policy, or any rider or endorsement attached thereto, as to the interest only of the Lender, its successors and
assigns, shall not be invalidated nor suspended. (a) by any error, omission, or change respecting the ownership, description, possession, or
location of the subject of the insurance or the interest therein, or the title thereto; (b) by the commencement of foreclosure proceedings or
the giving of notice of sale of any of the property covered by this policy by virtue of any mortgage or trust deed; (c) by any breach of
warranty, act, omission, neglect, or non-compliance with any of the provisions of this policy, including any and all riders now or hereafter
attached thereto, by the named insured, the borrower, mortgagor, buster, vendee, owner, tenant, warehouseman, custodian, occupant, or by
the agents of either or any of them or by the happening of any event permitted by them or either of them, or their agents, or which they
failed to prevent, whether occurring before or after the attachment of this endorsement, or whether before or after a loss, which under the
provisions of this policy of insurance or of any rider or endorsement attached thereto would invalidate or suspend the insurance as to the
named insured, excluding herefrom, however, any acts or emissions of the Lender while exercising active control and management of the
property.
3. In the event of failure of the insured to pay any premium or additional premium which shall be or become due under the terms of this policy
or on account of any change in occupancy or increase in hazard not permitted by this policy, this Company agrees to give written notice to
the Lender of such non-payment of premium, after sixty (60) days from and within one hundred and twenty (120) days after due date of such
premium and it is a condition of the continuance of the rights of the Lender hereunder that the Lender when so notified in writing by this
Company of the failure of the insured to pay such premium shall pay or cause to be paid the premium due within ten (10) days following
receipt of the Company's demand in writing therefor, If the Lender shall decline to pay said premium or additional premium, the rights of
the Lender under this Lender's Loss Payable Endorsement shall not be terminated before ten (10) days after receipt of said written notice by
the Lender.
4. Whenever this Company shall pay to the Lender any sum for loss or damage ander this policy and shall claim that as to the insured no
liability therefor exists, this Company, at its option, may pay to the Lender the whole principal sum and interest and other indebtedness due
or to become due from the insured, whether secured or unsecured, (with refund of all interest not accrued), and this Company, to the extent
of such payment, shall thereupon receive a full assignment and transfer, without recourse, of the debt and all rights mid securities held as
collateral thereto.
5. If there be any other insurance upon the within described property, this Company shall be liable under this policy as to the Lender for the
proportion of such loss or damage that the sum hereby insured bears to the entire insurance of similar character on said property under
policies held by, payable to and expressly consented to by the Lender. Any Contribution Clause included in any Fallen Building Clause
Waiver or any Extended Coverage Endorsement attached to this contract of insurance is hereby nullified, and also any Contribution Clause
in any other endorsement or rider attached to this contract of insurance is hereby nullified except Contribution Clauses for the compliance
with which the insured has received reduction in the rate charged or has received extension of the coverage to include hazards other than
fire and compliance with such Contribution Clause is made a part of the consideration for insuring such other hazards. The Lender upon the
payment to it of the full amount of its claim, will subrogme this Company (pro rata with all other insurers contributing to said payment) to
all of the Lender's rights of contribution under said other insurance.
6. This Company reserves the right to cancel this policy at any nine, as provided by its terms, but in such case this policy shall continue in
force for the benefit of the Lender for ten (10) days after written notice of such cancellation is received by the Lender and shall then cease.
7. This policy shall remain in full force and effect as to the interest of the Lender for a period of ten (10) days after its expiration unless an
acceptable policy in renewal thereof with loss thereunder payable to the Lender in accordance with the terms of this lender's Loss Payable
Endorsement, shall have been issued by some insurance company and accepted by the Lender.
8. Should legal title to and beneficial ownership of any of the property covered under this policy become vested in tine Lender or its agents,
insurance under this policy shall continue for the term thereof for the benefit of the Lender but, in such event, any privileges granted by this
Lender's Loss Payable Endorsement which are not also granted the insured under the terms and conditions of this policy and/or under other
riders or endorsements attached thereto shall not apply to the insurance hereunder as respects such property.
9. All notices herein provided to be give by the Company to the Lender in connection with this policy and this Lender's Loss Payable
Endorsement shall be mailed to or delivered to the Lender at its office or branch described on the first page of the policy.
Approved:
Board of Fire Underwriters of the Pacific,
California Bankers' Association
Committee on Insurance.
ISSUE DATE:
CERTIFICATE OF COVERAGE 06/08/2017
PRODUCER: THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO
RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
Alliant Insurance Services, Inc. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE MEMORANDUM OR POLICY
P.O. BOX 6450 BELOW:
NEWPORT BEACH, CA 92658-6450 COMPANIES AFFORDING COVERAGE
PH (949) 756-0271 / FAX (949) 756-2713,
LICENSE NO. OC36861 COMPANY LETTER (A) BIG INDEPENDENT CITIES EXCESS POOL
BIG INDEPENDENT CITIES EXCESS POOL MEMBER:
CITY OF SANTA ANA
ATTN: ED RAYA
RISK MANAGER
P.O. BOX 1988
SANTA ANA, CA 92702-1988
COMPANY LETTER (B)
COMPANY LETTER (C)
COMPANY LETTER (D)
COMPANY LETTER (E)
COMPANY LETTER (F)
THIS IS TO CERTIFY THAT THE MEMORANDUM OF COVERAGE OR POUCY(IES) LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE
FOR THE POLICY OR MEMORANDUM PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACTOR OTHER
DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAYBE ISSUED OR MAY PERTAIN, THE COVERAGES AFFORDED BY THE MEMORANDUM OR
POLICY(IES) DESCRIBED HEREIN ARE SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDITIONS OF SUCH MEMORANDUM OR POLICY. LIMITS
SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
COVERAGES POL COY RUMBER MO POLICYM
CO
LTR EFFECTIVE
EXCESS LIABILITY
OCCURRENCE FORM
A BO -05 07/01/2016
INCLUDING AUTOMOBILE
LIABILITY
MEMORANDUM I
OR POLICY LIMIT
EXPIRES
COMBINED I SELF-INSURED RETENTION
DESCRIPTION OF OPERATIONS/LOCATIONSA/EHICLES/RESTRICTIONS/SPECIAL ITEMS:
AS RESPECTS EQUIPMENT LEASE -PURCHASE AGREEMENT DATED JUNE 15, 2017 BYAND BETWEEN HOLMAN CAPITAL CORPORATION
AND THE CITY OF SANTAANA FOR 911 SYSTEM AS DESCRIBED IN EXHIBITA OF THE LEASE -PURCHASE AGREEMENT.
SANTA CRUZ COUNTY BANK IS INCLUDED AS ADDITIONAL INSURED SOLELY WITH RESPECT TO BODILY INJURY AND PROPERTY
DAMAGE ARISING OUT OF OPERATIONS AS DESCRIBED BY OR ON BEHALF OF THE NAMED INSURED PER ATTACHED ENDORSEMENT.
SUBJECT TO POLICY TERMS, CONDITIONS AND EXCLUSIONS.
SANTA CRUZ COUNTY BANK
ATTN: SHAWN LIPMAN
720 FRONT STREET, STE. 220
SANTA CRUZ, CA 95060
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL
30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED HEREIN BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
FN
BODILY
DIFFERENCE BETWEEN
INJURY
$1,000,000 POOL LIMIT
07/01/2017
AND
PROPERTY
AND
DAMAGE
$2,000,000
COMBINED I SELF-INSURED RETENTION
DESCRIPTION OF OPERATIONS/LOCATIONSA/EHICLES/RESTRICTIONS/SPECIAL ITEMS:
AS RESPECTS EQUIPMENT LEASE -PURCHASE AGREEMENT DATED JUNE 15, 2017 BYAND BETWEEN HOLMAN CAPITAL CORPORATION
AND THE CITY OF SANTAANA FOR 911 SYSTEM AS DESCRIBED IN EXHIBITA OF THE LEASE -PURCHASE AGREEMENT.
SANTA CRUZ COUNTY BANK IS INCLUDED AS ADDITIONAL INSURED SOLELY WITH RESPECT TO BODILY INJURY AND PROPERTY
DAMAGE ARISING OUT OF OPERATIONS AS DESCRIBED BY OR ON BEHALF OF THE NAMED INSURED PER ATTACHED ENDORSEMENT.
SUBJECT TO POLICY TERMS, CONDITIONS AND EXCLUSIONS.
SANTA CRUZ COUNTY BANK
ATTN: SHAWN LIPMAN
720 FRONT STREET, STE. 220
SANTA CRUZ, CA 95060
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL
30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED HEREIN BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF
ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
FN
THIS ENDORSEMENT DOES NOT CHANGE THE MEMORANDUM. PLEASE READ IT CAREFULLY.
ADDITIONAL COVERED PARTY - PRIMARY AND
NON-CONTRIBUTORY
This endorsement indentifies coverage provided under the following:
BICEP MASTER MEMORANDUM OF LIABILITY COVERAGE
The following wording can be found in SECTION VII -- CONDITIONS
20. Additional Covered Party:
If any primary insurance is held by the person(s), entity(ies), or organization(s) named by a
duly issued certificate as an ADDITIONAL COVERED PARTY, this insurance is primary
to that other insurance, but will apply in excess of the applicable COVERED PARTY's
SELF-INSURED RETENTION specified in the Declarations. BICEP shall not seek
contribution from the other insurance held by such ADDITIONAL COVERED PARTY for
amounts payable under this insurance.
This condition applies only with respect to liability for BODILY INJURY and PROPERTY
DAMAGE arising solely out of the negligent acts of the applicable COVERED PARTY, and
not with respect to any other liability.
This condition does not apply to a person(s), entity (ies) or organization(s) unless the
applicable COVERED PARTY had a specific written contract with that person(s), entity (ies)
or organization(s) that meets all of the following criteria:
a. The contract was duly approved by the MEMBER, and;
b. The contract requires that the person(s), entity(ies) or organization(s) be named as
an
ADDITIONAL COVERED PARTY under this Memorandum, and;
c. The COVERED PARTY received the request for designation as an ADDITIONAL
COVERED PARTY before the date that the applicable COVERED PARTY
begin operations or performance under the contract, and;
d. The contract requires that this insurance be primary.
712014 Ed BICEP MOC Attachment Page 1 of 1
Holman Capital Corporation
25201 Paseo de Alicia, Suite 290
Laguna Hills, CA 92653
EXI3IBIT C-2
June 15, 2017
Re: Equipment Lease -Purchase Agreement dated June 15, 2017
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):
tK 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:
Title: r ithia Kurtz
Inter m City Manager
C-2
MAYOR
Miguel A. Pulido
MAYOR PRO TEM
Michele Martinez
COUNCILMEMBERS
P. David Benavides
Vicente Sarmiento
Jose Solono
Sal Tinajero
Juan Villegas
June 8, 2017
Aditya Kajaria
Holman Capital Corporation
25201 Paseo de Alicia, Suite 290
Laguna Hills, CA 92653
CITY OF SANTA ANA
20 Civic Center Plaza . P.O. Box 1988
Santa Ana, California 92702
714-647-6900
www saote-ane org
Re: City of Santa Ana. Insiwence Program
To Whom It May Concern:
INTERIM CITY MANAGER
Cynthia J. Kurtz
CITY ATTORNEY
Sonia R. Carvalho
CLERK OF THE COUNCIL
Maria D. Huizar
The City of Santa Ana is a member of Big Independent Cities Excess Pool (BICEP). 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 BICLP, purchases excess statutory coverage through the California State Association of
Counties — Excess insurance Authority (CSAC-EIA) above $1,000,000. The City finds claim payments
tinder $1,000,000.
The City is also member of Public Entity Property Insurance Program (PEPIP). At present, membership is
over 6,400 entities. Current property insurance is $1B 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.
Should you have any questions concerning the City of Santa Ana's insurance program, please contact the
Risk Management Division at (714) 647-5470.
Sincerely,
Ed Raya
Executive Director of Personnel Services
cc: Robert J. Carroll, Police Administrative Manager
SANTA ANA CITY COUNCIL
Miguel A. Pulldo
Mayo,'
Michele Martinez
Mayor Pro Tem, Ward 2
Vicente Sarmiento Jose Soler. R David eanaNdas
Juan villa a^
9
Sal Tird
ynul.d r0 n i ory
mtmerl nexlo�s<nt�ala,plg
Ward 1 Word Wella
user lll¢nl CN t � na ora IsSln�ryy,@�4nnIN ung lr9 Gbenavitles(nsan
Wwal
6
rr�lg,grr�
Iv llen@§(gyenin",(Ut�i,p(0
�jpp�yq�idalnnrra=
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.
5. 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 ANA, as Lessee
am
[Signature Page to Essential Use Cert ficate]
D-2
EXHIBIT E
INCUMBENCY CERTIFICATE
I, Francisco Gutierrez, do hereby certify that I am the Executive 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 15, 2017 (the `Lease Agreement'), between the CITY OF SANTA
ANA and Holman Capital Corporation, as lessor, and
b. Enter into that certain Escrow dated June 15, 2017 (the "Escrow Agreement'), between
the CITY OF SANTA ANA, Santa Cruz County 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
Cynthia Kurtz Interim City Manager
IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the City of Santa Ana,
California.
June 15, 2017
Francisco Gutierrez, Executive Director of Finance
E-1
MAYOR
Miguel A. Pulido
MAYOR PRO TEM
Michele Martinez
COUNCILMEMBERS
P. David Benavides
Vicente Sarmiento
Jose Solorio
Sal Tinajero
Juan Villages
CITY OF SANTA ANA
OFFICE OF THE CITY ATTORNEY
20 Civic Center Plaza, M29 a P.O. Box 1988
Santa Ana, California 92702
714-647-5201 . Fax 714-647-6515
www.santa-ana.ora
June 15, 2017
Holman Capital Corporation
25201 Paseo de Alicia, Suite 290
Laguna Hills, CA 92653
INTERIM CITY MANAGER
Cynthia J. Kurtz
CITY ATTORNEY
Sonia R. Carvalho
CLERK OF THE COUNCIL
Maria D. Huizar
Re: Equipment Lease -Purchase Agreement and Equipment Schedule both dated June 15, 2017
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 15, 2017 (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, subj ect
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
SANTA ANA CITY COUNCIL
Miguel A. Pulido Michele Martinez Vicente Sarmiento Jose Solorio P. David Benavides Juan Villages Sal Tnajero
Mayor Mayor Pro Tem, Ward 2 Ward Ward Ward Ward Ward
mnulidonaanta-ana org rn rrartinez( Santa-ana ora vsarmientonsanta-ana ora jsolprierdtaanta-aua.ora dbenavidesna sanla-ana oro Iyillenasesautaana oro stinaieroradsantaana orn
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 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 fiords 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.
espe�ct/f�ul�l/y�%sub 'tted,
ai `YPYog a
ity Attorney
EXHIBIT G;
INTENTIONALLY OMITTED; LEASE IS NBQ.
G-1
EXHIBIT H
POST -ISSUANCE TAX COMPLIANCE PROCEDURES
Dated: June 15, 2017
The following certificate is delivered in connection with the execution and delivery of the
Equipment Lease -Purchase Agreement dated June 15, 2017 (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 $1,462,000.00 (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 Santa Cruz County Bank,
as escrow agent (the "Escrow Agent") pending acquisition of the Equipment under the terms of that certain
Escrow Agreement dated as of June 15, 2017 (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 -Arbitrage Certifications.
2.1. The Rental Payments due under the Financing Documents will be made with monies retained in Lessee's
general operating fund (or an account or subaccounttherein). No sinldng, debt service, reserve or similar fund
or account will be created or maintained for the payment of the Rental Payments due under the Financing
Documents or pledged as security therefor.
2.2. There have been and will be issued no obligations by or on behalf of Lessee that would be deemed to be
(i) issued or sold within fifteen (15) days before or after the date of issuance of the Financing Documents,
(ii) issued or sold pursuant to a common plan of financing with the Financing Documents and (iii) paid out of
substantially the same source of funds as, or deemed to have substantially the same claim to be paid out of
substantially the same source of funds as, the Financing Documents.
2.3. Lessee does not and will not have on hand any funds that are or will be restricted, segregated, legally
required or otherwise intended to be used, directly or indirectly, as a substitute, replacement or separate source
of financing for the Equipment.
2.4. No portion of the Principal Amount is being used by Lessee to acquire investments which produce a
yield materially higher than the yield realized by Lessor from Rental Payments received under the Financing
Documents.
2.5. The Principal Amount does not exceed the amount necessary for the governmental purpose for which
the Financing Documents were entered into. Such funds are expected to be needed and fully expended for
payment of the costs of acquiring, equipping and installing the Equipment.
2.6. Lessee does not expect to convey, sublease or otherwise dispose of the Equipment, in whole or in part,
at a date which is earlier than the final Payment Date trader 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: Temyorar Py eriod.
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 Amown
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 amotmt 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 15, 2017, but not later than June 15, 2018.
(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
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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.
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 malting loans the payment
of principal or interest of which are to be guaranteed, in whole or in park, 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.
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Section S. 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(x) 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 15, 2017.
CITY OF SANTA ANA, CALIFORNIA
By: C/, 2,-,A�7
Name" Cynthia Kurt
Title: Interim City Manager
H-4
LESSOR:
Holman Capital Corporation
25201 Paseo de Alicia, Suite 290
Laguna Hills, CA 92653
LESSEE:
City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92702
EXHIBIT I:
ESCROW AGREEMENT
ESCROW AGENT:
Santa Cruz County Bank
720 Front Street, Suite 220
Santa Cruz, CA 95060
THIS ESCROW AGREEMENT (this "Escrow Agreement") is made as of June 15, 2017, between
Holman Capital Corporation ("Lessor"), the City of Santa Ana ( "Lessee "), and Santa Cruz County Bank
(the "Escrow Agent").
Lessor and Lessee have heretofore entered into that certain Equipment Lease -Purchase Agreement
and Equipment Schedule both dated June 15, 2017 (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 $1,462,000.00 (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 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
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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.
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 from time to
time in a Santa Cruz County Bank non-interest bearing demand deposit account with no fees or
costs or, in the event such fund is not at the time available, such other investments as Lessee may
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 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
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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.
To the extent authorized by law, Lessee hereby agrees to indemnify and save the Escrow Agent
harmless against any liabilities that it may incur in the exercise and performance of its powers and
duties hereunder and that are not due to the Escrow Agent's gross negligence or willful misconduct.
No indemnification will be made under this Section or elsewhere in this Escrow Agreement for
damages arising solely out of gross negligence, willful misconduct, or bad faith by the Escrow
Agent, its officers, agents, employees, successors or assigns.
8. The Escrow Agent may at any time resign by giving at least 30 days' prior written notice to Lessee
and Lessor, but such resignation shall not take effect until the appointment of the successor Escrow
Agent. The substitution of another bank or trust company to act as Escrow Agent under this Escrow
Agreement may occur by written agreement of Lessor and Lessee. In addition, the Escrow Agent
may be removed at any time, with or without cause, by instrument in writing executed by Lessor
and Lessee. Such notice shall set forth the effective date of the removal. In the event of any
resignation or removal of the Escrow Agent, a successor Escrow Agent shall be appointed by an
instrument in writing executed by Lessor and Lessee. Such successor Escrow Agent shall indicate
its acceptance of such appointment by an instrument in writing delivered to Lessor, Lessee and the
predecessor Escrow Agent. Upon the effective date of resignation or removal, the Escrow Agent
will transfer the Escrow Fund then held by it to the successor Escrow Agent selected by Lessor and
Lessee.
9. This Escrow Agreement shall terminate upon receipt by the Escrow Agent of the written notice
from Lessor specified in Section 5(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.
if. 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.
I-3
15. Information Required Under USA PATRIOT ACT: The parties acknowledge that in order to help
the United States government fight the funding of terrorism and money laundering activities,
pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 0£ the USA
PATRIOT Act) all financial institutions are required to obtain, verify, record and update
information that identifies each person establishing a relationship or opening an account. The
parties to this Agreement agree that they will provide to the Escrow Agent such information as it
may request, from time to time, in order for the Escrow Agent to satisfy the requirements of the
USA PATRIOT Act, including but not limited to the name, address, tax identification number and
other information that will allow it to identify the individual or entity who is establishing the
relationship or opening the account and may also ask for formation documents such as articles of
incorporation or other identifying documents to be provided.
[Remainder ofpage intentionally left blank]
I-4
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly
executed as of the day and year first above set forth.
LESSOR: HOLMAN CAPITAL
ESCROW AGENT: SANTA CRUZ COUNTY BANK
LESSEE: CITY OF SANTA
Ma
Cynthia Kurtz
Interim City Manager
Name: Shawn Lipman
Title: Vice President, Senior Relationship Manager
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
By:
Lance S. Holman
President &CEO
ESCROW AGENT: SANTA CRUZ COUNTY BANK
ON
LESSEE: CITY OF SANTA
"I 7 , /, ,%
By: /
Cy-dthia Kurtz
Interim City Manager
Name: Shawn Lipman
Title: Vice President, Senior Relationship Manager
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
QTamuaBogPsi&m'
Assistant City Attorney
I-5
ATTEST:
MARIA D. HUIZAR
Cleric of the Council
RECOMMENDED FOR APPROVAL:
Chief of Police
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
0
LESSEE: CITY OF SANTA
By:
Lance S. Holman Cynthia Kurtz
President &CEO Interim City Manager
ESCROW AGENT: SANTA CRUZ 9OUN;PY BANY
In
Naive: Shawn Lipman// l/ V
Title: Vice President, Senior Relationship Manager
I-5
EXHIBIT A TO ESCROW AGREEMENT
CERTIFICATE OF ACCEPTANCE AND PAYMENT RFOUEST
The following payment request is directed to Santa Cruz County Bank (the "Escrow Agent"), as
escrow agent under that certain Escrow Agreement dated June 15, 2017 (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 Santa Cruz County Bank, all references herein to "Lessor" shall mean Santa Cruz County
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 15, 2017 (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").
DESCRIPTION OF
LOCATION UNITS OF EQUIPMENT AMOUNT PAYEE
Lessee hereby certifies and represents to and agrees with Lessor as follows with respect to the
Equipment described above: (i) the Equipment has been delivered to the location(s) set forth in the 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 aclmowledges 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.
Ib
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Holman Capital Corporation ("Lessor"), City of Santa Ana ("Lessee"), and Santa Cruz County Bank
("Escrow Agent") have entered into an Escrow Agreement dated June 15, 2017 (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 wider, the Escrow Agreement to Santa Cruz County 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 15, 2017
LESSQR:, HOLMAN CAPITAL
Holman
&CEO
SANTA CRUZ COUNTY BANK
Name: Shawn Lipman
Title: Vice President, Senior Relationship Manager
LESSEE: CITY OF SANTA ANA
By:
Cynthia Kurtz
Interim City Manager
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACI{NOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Holman Capital Corporation ("Lessor"), City of Santa Ana ("Lessee"), and Santa Cruz County Bank
("Escrow Agent") have entered into an Escrow Agreement dated June 15, 2017 (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 Santa Cruz County 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 15, 2017
LESSOR: HOLMAN CAPITAL
CORPORATION
By:
Lance S. Holman
President &CEO
SANTA CRUZ COUNTY BANK
By:
Name: Shawn Lipman
Title: Vice President, Senior Relationship Manager
LESSEE: CITY OF SANTA ANA
By
Cynthia I{udz
Interim City Manager
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Holman Capital Corporation ("Lessor"), City of Santa Ana ("Lessee"), and Santa Cruz County Bank
("Escrow Agent") have entered into an Escrow Agreement dated June 15, 2017 (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 Santa Cruz County 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 15, 2017
LESSOR: HOLMAN CAPITAL
CORPORATION
By:
Lance S. Holman
President &CEO
SANTA CRUZ COU)KY BANK
By: ✓%i � %r 1 _
Name: Shawn Lipman
Title: Vice President, Senior Relationship Manager
LESSEE: CITY OF SANTA ANA
an
Cynthia Kurtz
Interim City Manager
TB/05/24/17
RESOLUTION NO. 2017-024
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AUTHORIZING THE CITY MANAGER OR
EXECUTIVE DIRECTOR OF FINANCE TO ENTER INTO
AN EIGHT YEAR FINANCING AGREEMENT WITH
HOLMAN CAPITAL CORPORATION FOR FUNDING OF
THE CITY'S PORTION OF ITS PARTNERSHIP COSTS
FOR FY 2017-18 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 upgrade of the system backbone so that the
City of Santa Ana can operate a P25 compliant 800 MHz system and have the
Resolution No, 2017-024
Page 1 of 4
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 three year fiscal period for 2015-16, 2016-17 and 2017-18. This amount
also includes contingencies, document fees and interest.
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 enforcement, 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. The replacement of ancillary equipment at 25
radio sites began in FY 2016-17 and will continue into FY 2017-18.
H. The City adopted Resolution 2015-022, authorizing the ten year financing
agreement with Holman Capital on May 19, 2015. The terms of the financing
agreement with Holman Capital Corporation provided the funding necessary to
fulfill the City's commitment for the first two fiscal years of the 800 MHz backbone
upgrade costs, along with the programming, Installation and contract contingency
at an amount not to exceed $1,125,086 (principal and interest costs).
I. The City's costs (Partnership Costs), for participating in the Next Generation
systems, for the third year fiscal period is as follows: FY 2017-18 -
$1,652,015.04. The financing agreement with Holman Capital Corporation will
provide the funding necessary to fulfill the City's commitment for the 800 MHz
backbone upgrade costs, along with the programming and contract contingency
(principal and interest costs).
J. 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 an eight 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 Santa Cruz
County Bank, and execute any documents and/or make any assurances that are
necessary for the execution of -the agreements.
Resolution No, 2017-024
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 6" day of June, 2017,
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney (�
By:..
Tamara Bogosian
Assistant City Attorney
AYES: Councilmembers Benavides, Martinez Pulido Solorio_ Tinaiero
Villeaas (6)
NOES: Councilmembers None (0)
ABSTAIN: Councilmembers None (0)
NOT PRESENT: Councilmembers Sarmiento (1)
Resolution No. 2017-024
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.2017-024 to be the original resolution adopted by the City
Council of the City of Santa Ana on June 6, 2017.
Date: A
Maria D. Huizar
Clerk of the Council
City of Santa Ana
Resolution No. 2017-024
Page 4 of 4
Farm 8038-G Information Return for Tax -Exempt Governmental Obligations
► Under Internal Revenue Code Section 149 e
(Rev. September 2011)
0- Soo separate instructions. OMB No. 1545-0720
Department of the Treasury Caution: If the issue doe Is under $100,000, use Form 8038 -GC.
Interna! Revenue Service R '
Rnnnr+inn Au+l-n.ifw m - n
I Issuer's name
2 Issuer's employer identification number (FIN)
City of Santa Ana
96.6000785
3a Name of person (other then Issuer) with whom the IRS may communicate about this return (see instructions)
36 Telephone number of other person shown an 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
18
151 1
a CRY, town, or post office, state, and ZIP code
7 Date of Issue
Santa Ana, CA 92702
June 75, 2017
8 Name of Issue
9 CUSIP number
$1,462,000.00 Lease of 911 System Upgrades and Information
None
too Name and title of officer a other employee of the Issuer whom the IRS may cell for more information (see
too Telephone number of officer or other
instructions)
employee shown on 10a
Francisco Gutierrez, Executive Director of Finance
714.647.5422
III tea I■ I VPe Or Issue [enter the issue Orice). See the instructions and attach schedula.
11
12
13
14
15
16
17
16
19
20
Education. . . . . . . . _.._.-.
Health and hospital . . . . . .
Transportation . . . . . . . . . . . . . . . . . . . . . .
Public safety . . . . . . . . . . . . . . . . . . . . . . .
Environment (including sewage bonds) . . . . . . . . . . . . . .
Housing . . . . . . . . . . . . . . . . . . . . . . . .
Utilities . . . . . . . . . . . . . . . . . . . . . . . .
Other. Describe ►
If obligations are TANS or RANs, check only box 19a . . . . . . . . .
If obligations are BANs, check only box 19b . . . . .. . . . . .
if obligations are in the form of a lease or installment sale, check box . . . .
. . . .
. . . . . .
. . . .
. . . . . .
. . . . . .
. . . . ► ❑
. . . . 111
. . . . ► ❑
ti
12
13
14 1,462,000 DD
15
16
17
18
00
Description of Obligations. Complete for the entire issue for which
this form Is being filed.
24
Proceeds used for bond issuance costs (including underwriters' discount) . ,24 5,000
(a) Final maturity date (b) Issue price
(o) Stated redemption
price at maturity
(d) Weighted
average maturity
(e) Yield
21
05113/2025 1,462,000.00
NIA - Lease/IPA
1 4.10 years
3.100 %
' ,XLL
rI Uses Or MYOCee05 OT Bona Issue (including underwrlters' discount)
22
Proceeds used for accrued interest . . . . . . . . . . . . . . .
_
22
23
Issue price of entire issue (enter amount from line 21, column (b)) . . . . .
00
23
1,462,000
24
Proceeds used for bond issuance costs (including underwriters' discount) . ,24 5,000
00
25
Proceeds used for credit enhancement . . . . . . . . . . . . 25
26
Proceeds allocated to reasonably required reserve or replacement fund . 26
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) . . . . . . . . . . . . . . . . . . . . . .
.
29
51000
00
30
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here)
00
30
1,457,000
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . ► veers
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► veers
33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) . . . . . . ►
34 Enter the date(s) the refunded bonds were Issued ► (MM/DunWY)
For Paperwork Reduction Act Notice, see separate instructions. cat. No. 63773s Form 8038-G (Rev, 9-2811)
Form 8038-G
Page 2
35
Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35
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►
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 0-
0
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)(13)(1)(111) (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 0,
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 penury, 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 thatlh ve authoriz above.
Consent `
`-YCSe'e��Y�a 1_ a e7,_o9ol7/ Francisco Gutierrez,Exe.DirectorofFinance
Signature of Issuer's authorized representative Date Type or print name and title
Print/Type preparer's name Preparer's signature Date PTIN
�alfl Check ❑ if
Preparer self-employed
Use Only Firm's name Or RmnsEIN ►
Firm's address ► Phone no.
Form 8038-G (Rey: 9-2011)
CLOSING MEMORANDUM
$1,462,000.00 LEASE OF 911 SYSTEM UPGRADES AND INSTALLATIONS
PURSUANT TO THAT EQUIPMENT LEASE -PURCHASE AGREEMENT AND EQUIPMENT SCHEDULE THERETO
DATED JUNE 15, 2017
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 13, 2017. All documents
will be executed and two (2) blue ink originals will be overnighted to Holman Capital Corporation, 25201 Paseo de
Alicia, Suite 290, Laguna Hills, CA 92653, for delivery no later than 9:00 am on the morning of June 13, 2017 and
held in trust until such time as the wires and original documents are released by the Parties.
Closing: (1) By internal funds transfer and pending receipt of original, executed Lease Documents, on the morning
of June 15, 2017, 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:
Santa Cruz County Bank
ABA Number:
121143736
Account Number:
13020064
Account Name:
City of Santa Ana
(2) By wire transfer and pending receipt of original, executed Lease Documents, on the morning of
June 15, 2017, the Investor is authorized by Lessee to transfer via wire transfer the Issuance Costs (as defined below)
to Lessor, as follows:
Bank Name:
Community Business Bank
ABA Number:
121144191
Account Number:
201008281
Account Name:
Holman Capital Corporation
Holman Capital Corporation 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
TOTALSOURCES
Total Equipment Cost:
Issuance Costs:
TOTAL LEASE PROCEEDS
Attest:
CITY OF SANTA ANA
City Manager
$ 1,462,000.00
$ 1,462,000.00
$ 1,457,000.00
$ 5,000.00
$ 1,462,000.00
ASSIGNMENT AGREEMENT
between the
HOLMAN CAPITAL CORPORATION
and
SANTA CRUZ COUNTY BANK
Dated June 15, 2017
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.
SANTA CRUZ COUNTY
Investor
LN
Title: Vice President, Senior Relationship Manager
HOLMAN CAPITAL CORPORATION
Corporation
By:
Name: Lance S. Holman
Title: President & CEO
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.
SANTA CRUZ COUNTY BANK
Investor
By:
Name: Shawn Lipman
Title: Vice President, Senior Relationship Manager
HOLMAN CAJPITAL CORPORATION
By:
Na an S. Holman
Title: Pr dent & CEO
SCHEDULE A
ASSIGNMENT FROM: Holman Capital Corporation
TO: Santa Cruz County 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 15, 2017, between the City of Santa Ana,
California and Holman Capital Corporation;
Equipment Schedule (including the Payment Schedule attached therein) dated June 15, 2017 to
the Equipment Lease -Purchase Agreement, between the City of Santa Ana, California and Holman
Capital Corporation; and
Escrow Agreement dated June 15, 2017, between the City of Santa Ana, California and Santa
Cruz County Bank, together with any original Certificates of Acceptance and Payment Request
Forms delivered in connection therewith as of the date of the Assignment Agreement.