12-33-22-Ordinance-Issuing a Limited Tax Note Series 2023 5.065M-12/19/20224129-4793-0690.1
CITY OF SANGER, TEXAS
$5,065,000 LIMITED TAX NOTE, SERIES 2023
Ordinance Authorizing Issuance of the Note 1
Paying Agent/Registrar Agreement 2
General Certificate 3
Signature Identification and No-Litigation Certificate 4
Purchase Letter 5
Bond Review Board Questionnaire 6
Initial Tax Note 7
AG/Comptroller Letter 8
Tax Exemption Certificate 9
IRS Form 8038-G 10
Approving Opinion of Texas Attorney General and Comptroller Registration 11
Opinion of Bond Counsel 12
Standing Letter – Senate Bills 13 and 19 – ZMFU II, Inc. 13
Closing Memorandum 14
4155-3497-2739.2
CERTIFICATE FOR ORDINANCE NO. 12-33-22
THE STATE OF TEXAS §
COUNTY OF DENTON §
We, the undersigned officers of the City of Sanger, Texas (the “City”), hereby certify as
follows:
1. The City Council of the City convened in a regular meeting (the “Meeting”) on
December 19, 2022, at the regular meeting place, within the City, and the roll was called of the
duly constituted officers and members of the City Council, to wit:
Thomas Muir Mayor
Marissa Barrett Councilmember Place 1
Gary Bilyeu Councilmember Place 2
Dennis Dillon Councilmember Place 3
Allen Chick Councilmember Place 4
Victor Gann Councilmember Place 5
and all of such persons were present, except Marissa Barrett, thus constituting a quorum.
Whereupon, among other business, the following was transacted at the Meeting: a written
ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY
OF SANGER, TEXAS LIMITED TAX NOTE, SERIES 2023; SPECIFYING
THE TERMS AND FEATURES OF SUCH NOTE; LEVYING A
CONTINUING DIRECT ANNUAL AD VALOREM TAX FOR THE
PAYMENT OF SAID NOTE; AND RESOLVING OTHER MATTERS
INCIDENT AND RELATED TO THE ISSUANCE, SALE, PAYMENT, AND
DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT; AND
PROVIDING AN EFFECTIVE DATE
(the “Ordinance”) was duly introduced for the consideration of the City Council. It was then
duly moved and seconded that the Ordinance be adopted on first reading, and, after due
discussion, such motion, carrying with it the adoption of the Ordinance, prevailed and carried by
the following vote:
FOR: 4 AGAINST: 0 ABSTAINED: 0
2. That a true, full, and correct copy of the Ordinance is attached to and follows this
certificate; that the Ordinance has been duly recorded in the City Council’s minutes of the
Meeting; that the above and foregoing paragraph is a true, full, and correct excerpt from the City
4155-3497-2739.2
ORDINANCE NO. 12-33-22
AN ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF
CITY OF SANGER, TEXAS LIMITED TAX NOTE, SERIES 2023;
SPECIFYING THE TERMS AND FEATURES OF SUCH NOTE; LEVYING A
CONTINUING DIRECT ANNUAL AD VALOREM TAX FOR THE
PAYMENT OF SAID NOTE; AND RESOLVING OTHER MATTERS
INCIDENT AND RELATED TO THE ISSUANCE, SALE, PAYMENT, AND
DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT; AND
PROVIDING AN EFFECTIVE DATE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SANGER, TEXAS:
ARTICLE I
FINDINGS AND DETERMINATIONS
Section 1.1.Findings and Determinations.
The City Council hereby officially finds and determines that:
City of Sanger, Texas (the “City”), acting through its City Council, is authorized
pursuant to and in accordance with the provisions of Texas Government Code,
Chapter 1431, as amended (the “Act”), specifically §1431.004(a)(1), to issue
anticipation notes to provide all or part of the funds to pay contractual obligations
incurred or to be incurred for purposes authorized by the Act, to wit, (i) to finance
the cost of vehicles, (ii) to purchase equipment, (iii) to purchase three pieces of
property for use by the City, and (iv) for City-wide street, water, wastewater, and
electric improvements and (v) to pay the costs of issuing the Note.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1.Definitions.
As used herein, the following terms shall have the meanings specified, unless the context
clearly indicates otherwise:
“Act” shall mean Texas Government Code, Chapter 1431, as amended.
“Attorney General” shall mean the Attorney General of the State of Texas.
“City Council” shall mean the governing body of the City.
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“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Comptroller” shall mean the Comptroller of Public Accounts of the State of Texas.
“Interest Payment Date,” when used in connection with any Note, shall mean July 15,
2023 and each January 15 and July 15 thereafter until maturity or prior redemption.
“Issuance Date” shall mean the date on which the Note is delivered to and paid for by the
initial purchaser.
“Note” or “Notes” shall mean the City of Sanger, Texas Limited Tax Note, Series 2023,
authorized by this Ordinance.
“Ordinance” shall mean this Ordinance and any and all amendments hereof and
supplements hereto.
“Outstanding,” when used with reference to the Note, shall mean, as of a particular date,
any Note theretofore and thereupon delivered pursuant to this Ordinance except: (a) any Note
canceled by or on behalf of the City at or before such date; (b) any Note defeased pursuant to the
defeasance provisions of this Ordinance or otherwise defeased as permitted by applicable law;
and (c) any Note in lieu of or in substitution for which a replacement Note shall have been
delivered pursuant to this Ordinance.
“Paying Agent/Registrar” shall mean Zions Bancorporation, N.A. in Dallas, Texas and its
successors in that capacity.
“Paying Agent/Registrar Agreement” shall mean the agreement between the City and the
Paying Agent/Registrar setting forth the duties and obligations of the Paying Agent/Registrar
with respect to the Note.
“Purchaser” shall mean ZMFU II, Inc.
“Record Date” shall mean the close of business on the last business day of the calendar
month immediately preceding the applicable Interest Payment Date.
“Register” shall mean the registration books for the Note kept by the Paying
Agent/Registrar in which are maintained the names and addresses of, and the principal amounts
registered to, each Registered Owner of any Note.
“Registered Owner” or “Owner” shall mean the person or entity in whose name any Note
is registered in the Register.
Section 2.2.Interpretations.
All terms defined herein and all pronouns used in this Ordinance shall be deemed to
apply equally to singular and plural and to both genders and the neuter state. The titles and
headings of the articles and sections of this Ordinance have been inserted for convenience of
reference only and are not to be considered a part hereof and shall not in any way modify or
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restrict any of the terms or provisions hereof. This Ordinance and all the terms and provisions
hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the
validity of the Note and the validity of the levy of ad valorem taxes to pay the principal of and
interest on the Note.
ARTICLE III
TERMS OF THE NOTE
Section 3.1.Amount, Purpose and Authorization.
The Note shall be issued in fully registered form, without coupons, under and pursuant to
the authority of the Act in the total authorized aggregate principal amount of FIVE MILLION
SIXTY-FIVE THOUSAND DOLLARS ($5,065,000.00) (i) (v) to pay the costs of issuing the
Note.
Section 3.2.Designation, Date, and Interest Payment Dates.
The Note shall be designated as the “City of Sanger Limited Tax Note, Series 2023,”
shall be dated January 1, 2023 and shall be in the denomination of the full principal amount of
the Note. The Note shall bear interest at the rates set forth in Section 3.3 below, from the later of
the Issuance Date or the most recent Interest Payment Date to which interest has been paid or
duly provided for, calculated on the basis of a 360-day year of twelve 30-day months, payable on
July 15, 2023 and each January 15 and July 15 thereafter until maturity or prior redemption.
If interest on any Note is not paid on any Interest Payment Date and continues unpaid for
thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new record date for the
payment of such interest, to be known as a Special Record Date. The Paying Agent/Registrar
shall establish a Special Record Date when funds to make such interest payment are received
from or on behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the
date fixed for payment of such past due interest and notice of the date of payment and the Special
Record Date shall be sent by United States mail, first class, postage prepaid, not later than five
(5) days prior to the Special Record Date, to each affected Registered Owner as of the close of
business on the day prior to mailing of such notice.
Section 3.3.Numbers, Denomination, Interest Rates, and Maturities.
The Note shall be initially issued bearing the numbers, in the principal amounts and may
be transferred and exchanged as set out in this Ordinance. The Note shall initially bear interest at
the rate of 3.700% until the date of maturity or prepayment prior to maturity and may be
transferred as set out in this Ordinance.
Principal on the Note shall be payable in installments as set forth in the following
schedule. The Note shall mature on January 15, 2030 and all outstanding principal and accrued
interest shall be due and payable on such date. Notes delivered in transfer of or in exchange for
other Notes shall be numbered in order of their authentication by the Paying Agent/Registrar,
shall be in the denomination of $1,000 or integral multiples thereof, and shall mature on the same
date and bear interest at the same rate as the Note or Notes in lieu of which they are delivered.
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Principal on the Note shall be payable in annual installments on the dates and in the principal
amounts, respectively, as shown below:
Payment
Date
Principal
Payment
01/15/2024 $ 646,000
01/15/2025 670,000
01/15/2026 695,000
01/15/2027 722,000
01/15/2028 749,000
01/15/2029 777,000
01/15/2030* 806,000
*final maturity
Section 3.4.Optional Redemption.
The City reserves the right, at its option, to prepay the Note, in whole, at any time at par
plus accrued interest to the date of redemption. Notice of any redemption identifying the Note to
be redeemed in whole shall be given by the Paying Agent/Registrar at least thirty (30) days prior
to the date fixed for redemption by sending written notice by first class mail, postage prepaid, to
the Owner of each Note to be redeemed in whole at the address shown on the Register. Such
notices shall state the redemption date, the redemption price, and the place at which the Note is
to be surrendered for payment. Any notice given as provided in this Section 3.4 shall be
conclusively presumed to have been duly given, whether or not the Owner receives such notice.
By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar
for payment of the redemption price of the Note to be redeemed, plus accrued interest to the date
fixed for redemption. When the Note has been called for redemption in whole and due provision
has been made to redeem the same as herein provided, the Note so redeemed shall no longer be
regarded as Outstanding except for the purpose of receiving payment solely from the funds so
provided for redemption, and the rights of the Owners to collect interest which would otherwise
accrue after the redemption date on any Note or portion thereof called for redemption shall
terminate on the date fixed for redemption.
Section 3.5.Manner of Payment, Characteristics, Execution, and Authentication.
The Paying Agent/Registrar is hereby appointed the paying agent for the Note. The Note
shall be payable, shall have the characteristics, and shall be executed, registered, and
authenticated, all as provided and in the manner indicated in the FORM OF NOTE set forth in
Article IV of this Ordinance. If any officer of the City whose manual or facsimile signature shall
appear on the Note shall cease to be such officer before the authentication of the Note or before
the delivery of the Note, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such officer had remained in such office.
The approving legal opinion of Orrick, Herrington & Sutcliffe LLP, Houston, Texas,
Bond Counsel, may be printed on the Note over the certification of the City Secretary, which
may be executed in facsimile. CUSIP numbers also may be printed on the Note, but errors or
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omissions in the printing of either the opinion or the numbers shall have no effect on the validity
of the Note.
Section 3.6.Authentication.
Except for the Note to be initially issued, which need not be authenticated by the Paying
Agent/Registrar but shall be registered by the Comptroller, only such Note shall bear thereon a
certificate of authentication, substantially in the form provided in Article IV of this Ordinance,
manually executed by an authorized representative of the Paying Agent/Registrar, shall be
entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose. Such
duly executed certificate of authentication shall be conclusive evidence that the Note so
authenticated was delivered by the Paying Agent/Registrar hereunder.
Section 3.7.Ownership.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name any Note is registered as the absolute owner of such Note for the purpose of making and
receiving payment of the principal thereof and interest thereon and for all other purposes,
whether or not such Note is overdue, and neither the City nor the Paying Agent/Registrar shall be
bound by any notice or knowledge to the contrary. All payments made to the person deemed to
be the Registered Owner of any Note in accordance with this Section shall be valid and effective
and shall discharge the liability of the City and the Paying Agent/Registrar upon such Note to the
extent of the sums paid.
Section 3.8.Registration, Transfer and Exchange.
The Paying Agent/Registrar is hereby appointed the registrar for the Note. So long as
any Note remains Outstanding, the Paying Agent/Registrar shall keep the Register at its
designated corporate trust office in which, subject to such reasonable regulations as it may
prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of the Note in
accordance with the terms of this Ordinance. The Note may only be transferred to: (i) an affiliate
of the Purchaser; (ii) a “Bank” as defined in Section 3(a)(2) of the Securities Act of 1933 as
amended (the “Securities Act”); (iii) an “Accredited Investor” as defined in Regulation D under
the Securities Act; or (iv) a “Qualified Institutional Buyer” as defined in Rule 144A under the
Securities Act.
Each Note shall be transferable only upon the presentation and surrender thereof at the
designated corporate trust office of the Paying Agent/Registrar, accompanied by an assignment
duly executed by the Registered Owner or his authorized representative in form satisfactory to
the Paying Agent/Registrar. Upon due presentation of any Note for transfer, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two (72)
hours after such presentation, a new Note or Notes, registered in the name of the transferee or
transferees, in authorized denominations, and of the same maturity and aggregate principal
amount and bearing interest at the same rate as the Note or Notes so presented and surrendered.
All Notes shall be exchangeable upon the presentation and surrender thereof at the
designated corporate trust office of the Paying Agent/Registrar for a Note or Notes, of like
maturity and interest rate and in any authorized denomination, in an aggregate principal amount
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equal to the unpaid principal amount of the Note or Notes presented for exchange. The Paying
Agent/Registrar shall be and is hereby authorized to authenticate and deliver exchange Notes in
accordance with the provisions of this Section. Each Note delivered by the Paying
Agent/Registrar in accordance with this Section shall be entitled to the benefits and security of
this Ordinance to the same extent as the Note or Notes in lieu of which such Note is delivered.
All Notes issued in transfer or exchange shall be delivered to the Registered Owners
thereof at the designated corporate trust office of the Paying Agent/Registrar or sent by United
States mail, first class, postage prepaid.
The City or the Paying Agent/Registrar may require the Registered Owner of any Notes
to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection with the transfer or exchange of such Note. Any fee or charge of the Paying
Agent/Registrar for such transfer or exchange shall be paid by the City.
Section 3.9.Replacement Notes.
Upon the presentation and surrender to the Paying Agent/Registrar of a damaged or
mutilated Note, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Note, of the same maturity, interest rate, and principal amount, bearing a number
not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the
Registered Owner of such Note to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith and any other expenses connected
therewith, including the fees and expenses of the Paying Agent/Registrar and the City.
If any Note is lost, apparently destroyed, or wrongfully taken, the City, pursuant to the
applicable laws of the State of Texas and Ordinances of the City, and in the absence of notice or
knowledge that such Note has been acquired by a bona fide purchaser, shall execute, and the
Paying Agent/Registrar shall authenticate and deliver, a replacement Note of the same maturity,
interest rate, and principal amount, bearing a number not contemporaneously outstanding,
provided that the Registered Owner thereof shall have:
(a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction, or theft of such Note;
(b) furnished such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save and hold them harmless;
(c) paid all expenses and charges in connection therewith, including, but not limited
to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or
other governmental charge that may be imposed; and
(d) met any other reasonable requirements of the City and the Paying
Agent/Registrar.
If, after the delivery of such replacement Note, a bona fide purchaser of the original Note in lieu
of which such replacement Note was issued presents for payment such original Note, the City
and the Paying Agent/Registrar shall be entitled to recover such replacement Note from the
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person to whom it was delivered or any person taking therefrom, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost, or expense incurred by the City or the Paying Agent/Registrar in
connection therewith.
If any such mutilated, lost, apparently destroyed, or wrongfully taken Note has become or
is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Note, authorize the Paying Agent/Registrar to pay such Note.
Each replacement Note delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Note or Notes in lieu of which
such replacement Note is delivered.
Section 3.10.Cancellation.
All Notes paid in accordance with this Ordinance, and all Notes in lieu of which
exchange Notes or replacement Notes are authenticated and delivered in accordance herewith,
shall be canceled and destroyed upon the making of proper records regarding such payment. The
Paying Agent/Registrar shall periodically furnish the City with certificates of destruction of such
Notes.
ARTICLE IV
FORM OF NOTE
The Note, including the Form of Comptroller’s Registration Certificate, Form of Paying
Agent/Registrar Authentication Certificate, and Form of Assignment shall be in substantially the
following forms, with such omissions, insertions, and variations as may be necessary or
desirable, and not prohibited by this Ordinance:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SANGER, TEXAS
LIMITED TAX NOTE, SERIES 2023
NUMBER DENOMINATION
R-11 $5,065,000.00
REGISTERED REGISTERED
INTEREST RATE: 3.700%
1 The number of the initial Notes shall be preceded by the letter “I”; the number of Notes issued in exchange or
transfer for other Notes shall be preceded by the letter “R”.
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DATED DATE: January 1, 2023
ISSUANCE DATE: January 17, 2023
REGISTERED OWNER: ZMFU II, Inc.
PRINCIPAL AMOUNT: FIVE MILLION SIXTY-FIVE THOUSAND DOLLARS
THE CITY OF SANGER, TEXAS (the “City”), for value received, promises to pay to
the Registered Owner identified above or its registered assigns, upon presentation and surrender
of this Note at the designated corporate trust office of ZIONS BANCORPORATION, N.A. in
Dallas, Texas, or its successor (the “Paying Agent/Registrar”), as set forth in the following
schedule: [Insert information regarding years of maturity and principal amounts from Section 3.3
of Ordinance.] payable in any coin or currency of the United States of America which on the date
of payment of such principal is legal tender for the payment of debts due the United States of
America prior to maturity, calculated on the basis of a 360-day year composed of twelve 30-day
months, from the later of the Delivery Date specified above, or the most recent interest payment
date to which interest has been paid or duly provided for. Interest on this Note is payable on
July 15, 2023 and each January 15 and July 15 thereafter until maturity or prior redemption of
this Note, by check sent by United States mail, first class, postage prepaid, by the Paying
Agent/Registrar to the Registered Owner of record as of the close of business on the last day of
the calendar month immediately preceding the applicable interest payment date, as shown on the
registration books kept by the Paying Agent/Registrar. Any accrued interest payable at maturity
shall be paid upon presentation and surrender of this Note at the principal corporate trust office
of the Paying Agent/Registrar.
THIS NOTE IS ONE OF A DULY AUTHORIZED SERIES OF NOTES (the “Note”) in
the aggregate principal amount of $5,065,000 issued pursuant to an Ordinance adopted by the
City Council of the City on December 19, 2022 (the “Ordinance”), for the purpose of providing
all or part of the funds to pay contractual obligations incurred or to be incurred (i) to finance the
cost of vehicles, (ii) to purchase equipment, (iii) to purchase three pieces of property for use by
the City, and (iv) for City-wide street, water, wastewater, and electric improvements and (v) to
pay the costs of issuing the Note.
THIS NOTE shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Note either (i) is registered by the Comptroller of Public
Accounts of the State of Texas by due execution of the registration certificate endorsed hereon or
(ii) is authenticated by the Paying Agent/Registrar by due execution of the authentication
certificate endorsed hereon.
THE CITY RESERVES THE RIGHT at its option, to prepay the Note, in whole, at any
time at par plus accrued interest to the date of redemption.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the
date fixed for redemption by first class mail, postage prepaid, addressed to the registered owner
of each Note to be redeemed in whole at the address shown on the books of registration kept by
the Paying Agent/Registrar. When the Note has been called for redemption, and due provision
has been made to redeem the same, the principal amounts so redeemed shall be payable solely
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from the funds provided for redemption, and interest which would otherwise accrue on the
amounts called for redemption shall terminate on the date fixed for redemption.
THIS NOTE IS TRANSFERABLE only upon presentation and surrender at the
designated corporate trust office of the Paying Agent/Registrar, accompanied by an assignment
duly executed by the Registered Owner or its authorized representative, subject to the terms and
conditions of the Ordinance. This Note may only be transferred to: (i) an affiliate of the
Registered Owner; (ii) a “Bank” as defined in Section 3(a)(2) of the Securities Act of 1933 as
amended (the “Securities Act”); (iii) an “Accredited Investor” as defined in Regulation D under
the Securities Act; or (iv) a “Qualified Institutional Buyer” as defined in Rule 144A under the
Securities Act.
THIS NOTE IS EXCHANGEABLE at the designated corporate trust office of the Paying
Agent/Registrar for a Note or Notes of the same maturity and interest rate and in the principal
amount of $1,000 or any integral multiple thereof, subject to the terms and conditions of the
Ordinance.
THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of
any Note to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with the transfer or exchange of a Note. Any fee or charge of the Paying
Agent/Registrar for a transfer or exchange shall be paid by the City.
THE REGISTERED OWNER of this Note by acceptance hereof acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
IT IS HEREBY DECLARED AND REPRESENTED that this Note has been duly and
validly issued and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and to be done precedent to or in the issuance and delivery of this Note have
been performed, exist, and have been done in accordance with law; that the Note does not exceed
any constitutional or statutory limitation; and that annual ad valorem taxes sufficient to provide
for the payment of the interest on and principal of this Note, as such interest comes due and such
principal matures, have been levied and ordered to be levied, within the limits prescribed by law,
against all taxable property in the City and have been irrevocably pledged for such payment.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed
with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered
Owners of the Note assent by acceptance of the Note.
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IN WITNESS WHEREOF, the City has caused this Note to be signed by the Mayor and
countersigned by the City Secretary by their manual, lithographed, or printed facsimile
signatures on this Note.
CITY OF SANGER, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
* * *
FORM OF COMPTROLLER’S REGISTRATION CERTIFICATE
The following form of Comptroller’s Registration Certificate shall be attached or affixed
to each of the Notes initially delivered:
COMPTROLLER’S REGISTRATION CERTIFICATE
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO._______________
THE STATE OF TEXAS §
I hereby certify that this certificate has been examined, certified as to validity, and
approved by the Attorney General of the State of Texas, and that this certificate has been
registered by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this ________________.
Comptroller of Public Accounts
(SEAL) of the State of Texas
* * *
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FORM OF PAYING AGENT/REGISTRAR’S AUTHENTICATION CERTIFICATE
The following form of authentication certificate shall be printed on the face of each of the
Notes other than those initially delivered and registered by the Comptroller of Public Accounts
of the State of Texas:
AUTHENTICATION CERTIFICATE
This Note is one of the Notes described in and delivered pursuant to the within-
mentioned Ordinance; and, except for the Note initially delivered, this Note has been issued in
exchange for or replacement of a Note, Notes, or a portion of a Note or Notes of an issue which
originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
ZIONS BANCORPORATION, N.A.,
as Paying Agent/Registrar
By:
Authorized Signature:
Date of Authentication:
FORM OF ASSIGNMENT
The following form of assignment shall be printed on the back of each Note:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
________________________________________ attorney to transfer the within Note on the
books kept for registration thereof, with full power of substitution in the premises.
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DATED:
Signature Guaranteed:
NOTICE: Signature must be guaranteed by a
member firm of the New York Stock Exchange
or a commercial bank or trust company.
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered owner
as shown on the face of this Note in every
particular, without any alteration, enlargement,
or change whatsoever.
* * *
ARTICLE V
SECURITY FOR THE NOTE
Section 5.1.Pledge and Levy of Taxes.
(a) To provide for the payment of principal of and interest on the Note, there is hereby
levied, within the limits prescribed by law, for the current year and each succeeding year
thereafter, while the Note or any part of the principal thereof and the interest thereon remain
outstanding and unpaid, an ad valorem tax upon all taxable property within the City sufficient to
pay the interest on the Note and to create and provide a sinking fund of not less than 2% of the
principal amount of the Note or not less than the principal payable out of such tax, whichever is
greater, with full allowance being made for tax delinquencies and the costs of tax collection, and
such taxes, when collected, shall be applied to the payment of principal of and interest on the
Note by deposit to the Debt Service Fund (defined below) and to no other purpose.
(b) The City hereby declares its purpose and intent to provide and levy a tax legally
sufficient to pay the principal of and interest on the Note, it having been determined that the
existing and available taxing authority of the City for such purpose is adequate to permit a
legally sufficient tax. As long as any Note remains outstanding, all moneys on deposit in, or
credited to, the Debt Service Fund shall be secured by a pledge of security, as provided by law
for cities in the State of Texas.
Section 5.2.Debt Service Fund.
The City of Sanger, Texas Limited Tax Note, Series 2023 Debt Service Fund (the “Debt
Service Fund”) is hereby created as a special fund solely for the benefit of the Note. The City
shall establish and maintain such fund at an official City depository and shall keep such fund
separate and apart from all other funds and accounts of the City. Any amount on deposit in the
Debt Service Fund shall be maintained by the City in trust for the Registered Owners of the
Note. Such amount, plus any other amounts deposited by the City into such fund and any and all
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investment earnings on amounts on deposit in such fund, shall be used only to pay the principal
of, premium, if any, and interest on the Note.
Section 5.3.Further Proceedings.
After the Note to be initially issued have been executed, it shall be the duty of the Mayor
to deliver the Note to be initially issued and all pertinent records and proceedings to the Attorney
General for examination and approval. After the Note to be initially issued shall have been
approved by the Attorney General, they shall be delivered to the Comptroller for registration.
Upon registration of the Note to be initially issued, the Comptroller (or a deputy lawfully
designated in writing to act for the Comptroller) shall manually sign the Comptroller’s
registration certificate prescribed herein to be affixed or attached to the Note to be initially
issued, and the seal of said Comptroller shall be impressed or placed in facsimile thereon.
ARTICLE VI
CONCERNING THE PAYING AGENT/REGISTRAR
Section 6.1.Acceptance.
Zions Bancorporation, N.A. is hereby appointed as the initial Paying Agent/Registrar for
the Note pursuant to the terms and provisions of the Paying Agent/Registrar Agreement by and
between the City and the Paying Agent/Registrar. The Paying Agent/Registrar Agreement shall
be substantially in the form attached hereto as Exhibit A, the terms and provisions of which are
hereby approved, and the Mayor or, in the Mayor’s absence, the Mayor Pro Tem is hereby
authorized to execute and deliver such Paying Agent/Registrar Agreement on behalf of the City
in multiple counterparts and the City Secretary is hereby authorized to attest thereto. Such initial
Paying Agent/Registrar and any successor Paying Agent/Registrar, by undertaking the
performance of the duties of the Paying Agent/Registrar hereunder, and in consideration of the
payment of any fees pursuant to the terms of any contract between the Paying Agent/Registrar
and the City and/or the deposits of money pursuant to this Ordinance, shall be deemed to accept
and agree to abide by the terms of this Ordinance.
Section 6.2.Trust Funds.
All money transferred to the Paying Agent/Registrar in its capacity as Paying
Agent/Registrar for the Note under this Ordinance (except any sums representing Paying
Agent/Registrar’s fees) shall be held in trust for the benefit of the City, shall be the property of
the City, and shall be disbursed in accordance with this Ordinance.
Section 6.3.Notes Presented.
Subject to the provisions of Section 6.4, all matured Notes presented to the Paying
Agent/Registrar for payment shall be paid without the necessity of further instructions from the
City. Such Notes shall be canceled as provided herein.
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Section 6.4.Unclaimed Funds Held by the Paying Agent/Registrar.
Funds held by the Paying Agent/Registrar that represent principal of and interest on the
Note remaining unclaimed by the Registered Owner thereof after the expiration of three years
from the date such funds have become due and payable (a) shall be reported and disposed of by
the Paying Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property
Code, as amended, to the extent such provisions are applicable to such funds, or (b) to the extent
such provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar
to the City upon receipt by the Paying Agent/Registrar of a written request therefor from the
City.
The Paying Agent/Registrar shall have no liability to the Registered Owners of the Note
by virtue of actions taken in compliance with this Section.
Section 6.5.Paying Agent/Registrar May Own Notes.
The Paying Agent/Registrar, in its individual or any other capacity, may become the
owner or pledgee of Notes with the same rights it would have if it were not the Paying
Agent/Registrar.
Section 6.6.Successor Paying Agents/Registrars.
The City covenants that at all times while any Note is Outstanding it will provide a
legally qualified bank, trust company, financial institution, or other agency to act as Paying
Agent/Registrar for the Note. The City reserves the right to change the Paying Agent/Registrar
for the Note on not less than sixty (60) days’ written notice to the Paying Agent/Registrar, as
long as any such notice is effective not less than 60 days prior to the next succeeding principal or
interest payment date on the Note. Promptly upon the appointment of any successor Paying
Agent/Registrar, the previous Paying Agent/Registrar shall deliver the Register or a copy thereof
to the new Paying Agent/Registrar, and the new Paying Agent/Registrar shall notify each
Registered Owner, by United States mail, first class, postage prepaid, of such change and of the
address of the new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting
in that capacity, shall be deemed to have agreed to the provisions of this Ordinance.
ARTICLE VII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF NOTE
Section 7.1.Sale of Note.
The sale of the Note to the Purchaser, at a price equal to the par value thereof, is hereby
approved, and delivery of the Note to the Purchaser shall be made upon receipt by the City of the
purchase price therefor. The Purchase Letter shall be substantially in the form attached hereto as
Exhibit B, the terms and provisions of which are hereby approved, and the City Mayor or, in the
Mayor’s absence, the Mayor Pro Tem is hereby authorized to execute and deliver such Purchase
Letter on behalf of the City in multiple counterparts and the City Secretary is hereby authorized
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to attest thereto. The undersigned hereby finds, determines and declares that the terms of sale of
the Note is in the best interest of the City.
Section 7.2.Approval, Registration, and Delivery.
The Mayor is hereby authorized to have control and custody of the Note and all necessary
records and proceedings pertaining thereto pending their delivery, and the Mayor and other
officers and employees of the City are hereby authorized and directed to make such certifications
and to execute such instruments as may be necessary to accomplish the delivery of the Note and
to assure the investigation, examination, and approval thereof by the Attorney General and the
registration of the initial Note by the Comptroller. Upon registration of the Note, the
Comptroller (or the Comptroller’s certificates clerk or an assistant certificates clerk lawfully
designated in writing to act for the Comptroller) shall manually sign the Comptroller’s
Registration Certificates prescribed herein to be attached or affixed to each Note initially
delivered and the seal of the Comptroller shall be impressed or printed or lithographed thereon.
Section 7.3.Application of Proceeds of the Note.
Proceeds from the sale of the Note shall, promptly upon receipt by the City, be applied as
follows:
(1)Accrued interest, if any, shall be deposited into the Debt Service Fund
created in Section 5.2 of this Ordinance;
(2)A portion of the proceeds shall be applied to pay expenses arising in
connection with the issuance of the Note;
(3)The remaining proceeds shall be applied, together with other funds of the
City, to provide funds (i) to finance the cost of vehicles, (ii) to purchase equipment, (iii)
to purchase three pieces of property for use by the City, and (iv) for City-wide street,
water, wastewater, and electric improvements and (v) to pay the costs of issuing the Note.
(4)Any proceeds from the sale of the Note remaining after making all the
foregoing deposits and payments shall be deposited into the Debt Service Fund and used
to pay debt service on the Note.
Section 7.4.Tax Exemption.
The City intends that the interest on the Note shall be excludable from gross income of
the owners thereof for federal income tax purposes pursuant to sections 103 and 141 through 150
of the Internal Revenue Code of 1986, as amended (the “Code”), and all applicable temporary,
proposed, and final regulations (the “Regulations”) and procedures promulgated thereunder and
applicable to the Note. For this purpose, the City covenants that it will monitor and control the
receipt, investment, expenditure, and use of all gross proceeds of the Note (including all
property, the purchase and refurbishment of which is to be financed directly or indirectly with
the proceeds of the Note) and take or omit to take such other and further actions as may be
required by sections 103 and 141 through 150 of the Code and the Regulations to cause interest
on the Note to be and remain excludable from the gross income, as defined in section 61 of the
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Code, of the owners of the Note for federal income tax purposes. Without limiting the generality
of the foregoing, the City shall comply with each of the following covenants:
(a)The City will use all of the proceeds of the Note to (a) provide funds to
pay contractual obligations incurred or to be incurred (i) to finance the cost of vehicles,
(ii) to purchase equipment, (iii) to purchase three pieces of property for use by the City,
and (iv) for City-wide street, water, wastewater, and electric improvements and (v) to pay
the costs of issuing the Note. The City will not use any portion of the proceeds of the
Note to pay the principal of or interest or redemption premium on, any other obligation of
the City or a related person;
(b)The City will not directly or indirectly take any action or omit to take any
action, which action or omission would cause the Note to constitute “private activity
bonds” within the meaning of section 141(a) of the Code;
(c)Principal of and interest on the Note will be paid solely from ad valorem
taxes, collected by the City, investment earnings on such collections, other legally
available funds, and as available, proceeds of the Note;
(d)Based upon all facts and estimates now known or reasonably expected to
be in existence on the date the Note is delivered, the City reasonably expects that the
proceeds of the Note will not be used in a manner that would cause the Note or any
portion thereof to be an “arbitrage bond” within the meaning of section 148 of the Code;
(e)At all times while the Note is outstanding, the City will identify and
properly account for all amounts constituting gross proceeds of the Note in accordance
with the Regulations. The City will monitor the yield on the investments of the proceeds
of the Note and, to the extent required by the Code and the Regulations, will restrict the
yield on such investments to a yield which is not materially higher than the yield on the
Note. To the extent necessary to prevent the Note from constituting “arbitrage bonds,”
the City will make such payments as are necessary to cause the yield on all yield
restricted nonpurpose investments allocable to the Note to be less than the yield that is
materially higher than the yield on the Note;
(f)The City will not take any action or knowingly omit to take any action
that, if taken or omitted, would cause the Note to be treated as “federally guaranteed”
obligations for purposes of section 149(b) of the Code;
(g)The City represents that not more than fifty percent (50%) of the proceeds
of the Note will be invested in nonpurpose investments (as defined in section
148(f)(b)(A) of the Code) having a substantially guaranteed yield for four years or more
within the meaning of section 149(g)(3)(A)(ii) of the Code, and the City reasonably
expects that at least eighty-five percent (85%) of the spendable proceeds of the Note will
be used to carry out the governmental purpose of the Note within the three-year period
beginning on the date of issue of the Note;
(h)The City will take all necessary steps to comply with the requirement that
certain amounts earned by the City on the investment of the gross proceeds of the Note, if
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any, be rebated to the federal government. Specifically, the City will (i) maintain records
regarding the receipt, investment, and expenditure of the gross proceeds of the Note as
may be required to calculate such excess arbitrage profits separately from records of
amounts on deposit in the funds and accounts of the City allocable to other obligations of
the City or moneys which do not represent gross proceeds of any obligations of the City
and retain such records for at least six years after the day on which the last outstanding
Note is discharged, (ii) account for all gross proceeds under a reasonable, consistently
applied method of accounting, not employed as an artifice or device to avoid in whole or
in part, the requirements of section 148 of the Code, including any specified method of
accounting required by applicable Regulations to be used for all or a portion of any gross
proceeds, (iii) calculate, at such times as are required by applicable Regulations, the
amount of excess arbitrage profits, if any, earned from the investment of the gross
proceeds of the Note, and (iv) timely pay, as required by applicable Regulations, all
amounts required to be rebated to the federal government. In addition, the City will
exercise reasonable diligence to assure that no errors are made in the calculations
required by the preceding sentence and, if such an error is made, to discover and
promptly correct such error within a reasonable amount of time thereafter, including
payment to the federal government of any delinquent amounts owed to it, interest thereon
and any penalty;
(i)The City will not directly or indirectly pay any amount otherwise payable
to the federal government pursuant to the foregoing requirements to any person other
than the federal government by entering into any investment arrangement with respect to
the gross proceeds of the Note that might result in a reduction in the amount required to
be paid to the federal government because such arrangement results in a smaller profit or
a larger loss than would have resulted if such arrangement had been at arm’s length and
had the yield on the Note not been relevant to either party;
(j)The City will timely file or cause to be filed with the Secretary of the
Treasury of the United States the information required by section 149(e) of the Code with
respect to the Note on such form and in such place as the Secretary may prescribe;
(k)The City will not issue or use the Note as part of an “abusive arbitrage
device” (as defined in Section 1.148-10(a) of the Regulations). Without limiting the
foregoing, the Note is not and will not be a part of a transaction or series of transactions
that attempts to circumvent the provisions of section 148 of the Code and the
Regulations, by (i) enabling the City to exploit the difference between tax-exempt and
taxable interest rates to gain a material financial advantage, or (ii) increasing the burden
on the market for tax-exempt obligations;
(l)Proper officers of the City charged with the responsibility for issuing the
Note is hereby directed to make, execute, and deliver certifications as to facts, estimates,
or circumstances in existence as of the date of issuance of the Note and stating whether
there are facts, estimates, or circumstances that would materially change the City’s
expectations. On or after the date of issuance of the Note, the City will take such actions
as are necessary and appropriate to assure the continuous accuracy of the representations
contained in such certificates; and
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(m)The covenants and representations made or required by this Section are for
the benefit of the holders of the Note and any subsequent holder of a Note and may be
relied upon by the holders of the Note and any subsequent holder of a Note and bond
counsel to the City.
In complying with the foregoing covenants, the City may rely upon an unqualified
opinion issued to the City by Orrick, Herrington & Sutcliffe LLP or other nationally recognized
bond counsel that any action by the City or reliance upon any interpretation of the Code or
Regulations contained in such opinion will not cause interest on the Note to be includable in
gross income for federal income tax purposes under existing law.
Notwithstanding any other provision of this Ordinance, the City’s representations and
obligations under the covenants and provisions of this Section 7.4 shall survive the defeasance
and discharge of the Note for as long as such matters are relevant to the exclusion of interest on
the Note from the gross income of the owners for federal income tax purposes.
Section 7.5.Reserved.
Section 7.6.Related Matters.
In order that the City shall satisfy in a timely manner all of its obligations under this
Ordinance, the Mayor, City Secretary, and all other appropriate officers, agents, representatives,
and employees of the City are hereby authorized and directed to take all other actions that are
reasonably necessary to provide for the issuance and delivery of the Note, including, without
limitation, executing and delivering on behalf of the City all certificates, consents, receipts,
requests, notices, and other documents as may be reasonably necessary to satisfy the City’s
obligations under this Ordinance and to direct the transfer and application of funds of the City
consistent with the provisions of this Ordinance.
ARTICLE VIII
MISCELLANEOUS
Section 8.1.Defeasance.
The City may defease the provisions of this Ordinance and discharge its obligations to the
Registered Owners of any Note or all of the Notes to pay the principal of and interest thereon in
any manner permitted by law, including by depositing with the Paying Agent/Registrar or with
the Comptroller either:
(a)cash in an amount equal to the principal amount of such Note plus interest
thereon to the date of maturity; or
(b)pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable
obligations of United States of America, including obligations that are unconditionally
guaranteed by the United States of America; (ii) noncallable obligations of an agency or
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instrumentality of the United States, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on the date the governing
body of the issuer adopts or approves the proceedings authorizing the issuance of
refunding bonds, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent; or (iii) noncallable obligations of a state
or an agency or a county, municipality, or other political subdivision of a state that have
been refunded and that, on the date the governing body of the issuer adopts or approves
the proceedings authorizing the issuance of refunding bonds, are rated as to investment
quality by a nationally recognized investment rating firm not less than AAA or its
equivalent, which, in the case of (i), (ii), or (iii), may be in book-entry form, and the
principal of and interest on which will, when due or redeemable at the option of the
holder, without further investment or reinvestment of either the principal amount thereof
or the interest earnings thereon, provide money in an amount which, together with other
moneys, if any, held in such escrow at the same time and available for such purpose, shall
be sufficient to provide for the timely payment of the principal of and interest thereon to the
date of maturity.
Upon such deposit, such Note shall no longer be regarded to be Outstanding or unpaid. Any
surplus amounts not required to accomplish such defeasance shall be returned to the City.
Section 8.2.Legal Holidays.
In any case where the date interest accrues and becomes payable on the Note or principal
of the Note matures or a Record Date shall be a Saturday, Sunday, legal holiday, or a day on
which banking institutions in the State of Texas are authorized by law to close, then payment of
interest or principal need not be made on such date, or the Record Date shall not occur on such
date, but payment may be made or the Record Date shall occur on the next succeeding day which
is not a Saturday, Sunday, legal holiday, or a day on which banking institutions in the State of
Texas are authorized by law to close with the same force and effect as if (i) made on the date of
maturity and no interest shall accrue for the period from the date of maturity to the date of actual
payment or (ii) the Record Date had occurred on the fifteenth day of that calendar month.
Section 8.3.Ordinance a Contract - Amendments.
This Ordinance shall constitute a contract with the Registered Owners from time to time,
be binding on the City, and shall not be amended or repealed by the City so long as any Note
remains Outstanding except as permitted in this Section. The City may, without the consent of
or notice to any Registered Owners, from time to time and at any time, amend this Ordinance in
any manner not detrimental to the interests of the Registered Owners, including the curing of any
ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with
the consent of Registered Owners who own in the aggregate 51% of the principal amount of the
Note then Outstanding, amend, add to, or rescind any of the provisions of this Ordinance;
provided that, without the consent of all Registered Owners of Outstanding Notes, no such
amendment, addition, or rescission shall (i) extend the time or times of payment of the principal
of and interest on the Note, reduce the principal amount thereof or the rate of interest thereon, or
in any other way modify the terms of payment of the principal of or interest on the Note, (ii) give
any preference to any Note over any other Note, or (iii) reduce the aggregate principal amount of
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Note required to be held by Registered Owners for consent to any such amendment, addition, or
rescission.
Section 8.4.No Recourse Against City Officials.
No recourse shall be had for the payment of principal of or interest on any Note or for
any claim based thereon or on this Ordinance against any official of the City or any person
executing any Note.
Section 8.5.Power to Revise Form of Documents.
Notwithstanding any other provision of this Ordinance, the Mayor or Mayor Pro Tem is
hereby authorized to make or approve such revisions, additions, deletions, and variations to this
Ordinance and in the form of the documents attached hereto as exhibits as, in the judgment of the
Mayor, and in the opinion of Bond Counsel to the City, may be necessary or convenient to carry
out or assist in carrying out the purposes of this Ordinance, or as may be required for approval of
the Note by the Attorney General of Texas; provided, however, that any changes to such
documents resulting in substantive amendments to the terms and conditions of the Note or such
documents shall be subject to the prior approval of the City Council. If insurance is obtained on
any of the Notes, the Notes shall bear, as appropriate and applicable, a legend concerning
insurance as provided by the municipal bond insurance company issuing any such insurance.
Section 8.6.Severability.
If any Section, paragraph, clause, or provision of this Ordinance shall for any reason be
held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph,
clause, or provision shall not affect any of the remaining provisions of this Ordinance.
Section 8.7.Open Meeting.
It is hereby found, determined and declared that a sufficient written notice of the date,
hour, place, and subject of the meeting of the City Council at which this Ordinance was adopted
was posted at a place convenient and readily accessible at all times to the general public at the
time required by law preceding this meeting, as required by the Open Meetings Law, Chapter
551, Texas Government Code, and that this meeting has been open to the public as required by
law at all times during which this Ordinance and the subject matter thereof has been discussed,
considered, and formally acted upon. The City Council further ratifies, approves, and confirms
such written notice and the contents and posting thereof.
Section 8.8.Repealer.
All orders, resolutions, and ordinances, or parts thereof, inconsistent herewith are hereby
repealed to the extent of such inconsistency.
Section 8.9.Effective Date.
This Ordinance shall be in force and effect from and after its passage on the date shown
below.
4155-3497-2739.2
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
See Tab 2
4155-3497-2739.2
EXHIBIT B
FORM OF PURCHASE LETTER
See Tab 7
4158-2018-5411.2
PAYING AGENT/REGISTRAR AGREEMENT
THIS PAYING AGENT/REGISTRAR AGREEMENT (together with any amendments
or supplements hereto, this “Agreement”) is entered into as of December 19, 2022 by and
between the CITY OF SANGER, TEXAS (the “Issuer”), and ZIONS BANCORPORATION,
N.A. in Dallas, Texas, as paying agent/registrar (together with any successor in such capacity,
the “Bank”).
WITNESSETH:
WHEREAS, the Issuer has duly authorized and provided for the issuance of its Limited
Tax Note, Series 2023 (the “Note”) in the aggregate principal amount of $5,065,000 to be issued
as a fully registered Note;
WHEREAS, all things necessary to make the Note the valid obligation of the Issuer, in
accordance with its terms, will be done upon the issuance and delivery thereof;
WHEREAS, the Issuer and the Bank wish to provide the terms under which the Bank will
act as Paying Agent to pay the principal of and interest on the Note, in accordance with the terms
thereof, and under which the Bank will act as Registrar for the Note; and
WHEREAS, the Issuer and the Bank have duly authorized the execution and delivery of
this Agreement; and all things necessary to make this Agreement the valid agreement of the
parties, in accordance with its terms, have been done.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01.Appointment.
The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Note, to
pay to the Registered Owner of the Note, in accordance with the terms and provisions of this
Agreement and the Ordinance authorizing the issuance of the Note, the principal installments of
and interest on the Note. The Issuer hereby appoints the Bank as Registrar with respect to the
Note and the Bank hereby accepts its appointment and agrees to act as Paying Agent and
Registrar.
Section 1.02.Compensation.
As compensation for the Bank's services as Paying Agent and Registrar, the Issuer hereby
agrees to pay the Bank the fees set forth in the Bank's fee schedule attached as Exhibit A hereto
upon receipt of any invoice therefor. The Bank reserves the right to amend the fee schedule at
any time, provided the Bank shall have furnished the Issuer with a written copy of such amended
fee schedule at least 75 days prior to the date that the new fees are to become effective.
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ARTICLE TWO
DEFINITIONS
Section 2.01.Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
“Bank” means ZIONS BANCORPORATION, N.A. in Dallas, Texas.
“Issuer” means the City of Sanger, Texas.
“Note” or “Notes” means any one or all of the Issuer’s Limited Tax Note, Series 2023.
“Ordinance” means the Ordinance of the Issuer adopted by its City Council on
December 19, 2022, pursuant to which the Note is issued.
“Paying Agent” means the Bank when it is performing the function of paying agent.
“Person” means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any agency or political
subdivision of a government or any entity whatsoever.
“Registrar” means the Bank when it is performing the function of registrar.
All other capitalized terms shall have the meanings assigned to them in the Ordinance.
ARTICLE THREE
DUTIES OF THE BANK
Section 3.01.Initial Delivery of Note.
The Note will be initially registered and delivered to the purchaser designated by the
Issuer as set forth in the Ordinance.
Section 3.02.Duties of Paying Agent.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal
installments of and interest on the Note in accordance with the provisions of the Ordinance.
The Issuer acknowledges that Paying Agent shall not be responsible for delays in
payment of principal installments or interest on the Note to the extent such delays are caused by
the Issuer’s failure to provide adequate collected funds for such payments.
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Section 3.03.Duties of Registrar.
The Bank shall provide for the proper registration of the Note and the exchange,
replacement, and registration of transfer of the Note in accordance with the provisions of the
Ordinance. Any changes to Registered Owners for such exchange, replacement, and registration
shall be made by the Bank only in accordance with the Ordinance. The Bank will maintain the
books of registration in accordance with the Ordinance and the Bank’s general practices and
procedures in effect from time to time. The Bank shall maintain a copy of the books of
registration at its offices in Athens, Texas.
Section 3.04.Unauthenticated Note.
The Issuer shall provide an adequate inventory of unauthenticated Note to facilitate
transfers. The Bank covenants that it will maintain such unauthenticated Note in safekeeping
and will use reasonable care in maintaining such Note in safekeeping, which shall be not less
than the care it maintains for debt securities of other government entities or corporations for
which it serves as registrar, or which it maintains for its own notes.
Section 3.05.Reports.
The Bank will provide the Issuer reports upon request (but not more often than once each
three months). The Issuer may also inspect and make copies of the information in the books of
registration at any time the Bank is customarily open for business, provided that reasonable time
is allowed the Bank to provide an up-to-date listing or to convert the information into written
form.
Section 3.06.Canceled Note.
All Notes surrendered for payment, transfer, exchange, or replacement, if surrendered to
the Bank, shall be promptly canceled by it and, if surrendered to the Issuer, shall be delivered to
the Bank and, if not already canceled, shall be promptly canceled by the Bank. The Issuer may
at any time deliver to the Bank for cancellation any Notes previously authenticated and delivered
which the Issuer may have acquired in any lawful manner whatsoever, and any Notes so
delivered shall be promptly canceled by the Bank. All canceled Notes held by the Bank shall be
destroyed and evidence of such destruction furnished to the Issuer.
Section 3.07.Reliance on Documents, Etc.
(a)The Issuer acknowledges and agrees that the Bank (i) shall be obligated only for
the performance of such duties as are specifically set forth herein; (ii) shall not be obligated to
take any legal or other action hereunder which might in its judgment involve expense or liability
unless it shall have been furnished with indemnity acceptable to it; (iii) may rely on and shall be
protected in acting or refraining from acting upon any written notice, instruction, instrument,
statement, request, or document furnished to it hereunder and believed by it to be genuine and to
have been signed or presented by the proper person, and shall have no responsibility for
determining the accuracy thereof; and (iv) may consult counsel satisfactory to it, including in-
house counsel, and the advice or opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered, or omitted by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
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(b)Neither the Bank nor any of its directors, officers, or employees shall be liable to
anyone for any action taken or omitted to be taken by it or any of its directors, officers, or
employees hereunder except in the case of negligence or willful misconduct. To the extent
permitted by law, the Issuer covenants and agrees to indemnify the Bank and hold it harmless
without limitation from and against any loss, liability, or expense of any nature incurred by the
Bank arising out of or in connection with the Agreement or the administration of its duties
hereunder, including, but not limited to, legal fees and expenses and other costs and expenses of
defending or preparing to defend against any claim of liability in the premises, unless such loss
shall be caused by the Bank’s negligence or willful misconduct.
(c)The Bank shall not be liable to the Issuer for actions taken under this Agreement
as long as it acts in good faith and exercises due diligence, reasonableness and care, as prescribed
by law, with regard to its duties hereunder.
(d)This Agreement is not intended to require the Bank to expend its own funds for
performance of any of its duties hereunder.
(e)The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys.
Section 3.08.Money Held by Bank.
A fiduciary account shall at all times be kept and maintained by the Bank for receipt,
safekeeping, and disbursement of moneys received from the Issuer hereunder for the payment of
the Note.
The Bank shall deposit all moneys received from the Issuer into a trust account to be held
in a fiduciary capacity for the payment of the Note, with such moneys in the account that exceed
the deposit insurance available by the Federal Deposit Insurance Corporation to be fully
collateralized with securities or obligations that are eligible under the laws of the State of Texas
to secure and be pledged as collateral for trust accounts until the principal and interest on such
Note have been presented for payment and paid to the Registered Owners.
The Bank shall be under no obligation to pay interest on any money received by it
hereunder.
Any money deposited with the Bank for the payment of the principal, redemption
premium, if any, or interest on any Note and remaining unclaimed by the Registered Owner after
the expiration of three years from the date such funds have become due and payable shall be
reported and disposed of by the Bank in accordance with the provisions of Texas law including,
to the extent applicable, Title 6 of the Texas Property Code, as amended. To the extent such
provisions of the Property Code do not apply to the Interest and Sinking Fund, such funds shall
be paid by the Bank to the Issuer upon receipt of a written request therefor from the Issuer. The
Bank shall have no liability to the Registered Owner of the Note by virtue of actions taken in
compliance with the foregoing provision.
All money deposited with the Bank hereunder shall be secured in the manner and to the
fullest extent required by law (including Ch. 2257, Texas Government Code) for the security of
funds of the Issuer.
-5-
4158-2018-5411.2
ARTICLE FOUR
MISCELLANEOUS PROVISIONS
Section 4.01.May Own Note.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
the Note with the same rights it would have if it were not the Paying Agent and Registrar for the
Note.
Section 4.02.Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereto.
Section 4.03.Assignment.
This Agreement may not be assigned by either party without the prior written consent of
the other.
Section 4.04.Notices.
Any request, demand, authorization, direction, notice, consent, waiver, or other document
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or
delivered to the Issuer or the Bank, respectively, at the addresses shown herein, or such other
address as may have been given by one party to the other by 15 days' prior written notice.
Section 4.05.Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 4.06.Successors and Assigns.
All covenants and agreements herein by the Issuer and the Bank shall bind their
successors and assigns, whether so expressed or not.
Section 4.07.Severability.
If any provision of this Agreement shall be invalid or unenforceable, the validity and
enforceability of the remaining provisions hereof shall not in any way be affected or impaired.
Section 4.08.Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto
and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim
hereunder.
-6-
4158-2018-5411.2
Section 4.09.Ordinance Governs Conflicts.
This Agreement and the Ordinance constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent and Registrar and if any conflict exists
between this Agreement and the Ordinance, the Ordinance shall govern.
Section 4.10.Term and Termination.
This Agreement shall be effective from and after its date and may be terminated for any
reason by the Issuer or the Bank at any time upon 60 days' written notice; provided, however,
that no such termination shall be effective until a successor has been appointed and has accepted
the duties of the Bank hereunder. The Issuer shall notify the registered owner of the Note of the
appointment of a successor Paying Agent/Registrar in accordance with the Ordinance. In the
event of early termination of this Agreement, regardless of circumstances, the Bank shall deliver
to the Issuer or its designee all funds, Notes, and all books and records pertaining to the Bank's
role as Paying Agent and Registrar with respect to the Note, including, but not limited to, the
books of registration.
Section 4.11.Governing Law.
This Agreement shall be construed in accordance with and shall be governed by the laws
of the State of Texas.
Section 4.12.Force Majeure.
The Bank shall not be responsible for delays or failures in performance resulting from
acts beyond its control. Such acts shall include, but not be limited to, acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact,
fire, communication line failures, computer viruses, power failures, earthquakes, or other
disasters.
Section 4.13.Reproduction of Documents.
This Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers, and modifications which may hereafter be executed, and (b) certificates
and other information previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, optical disks, micro-card, miniature photograph, or other similar process.
The parties hereto agree that any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the regular course of its
business, and that any enlargement, facsimile, or further reproduction shall likewise be
admissible in evidence.
Section 4.14.Counterparts.
This Agreement may be executed in several counterparts, each of which, when so
executed, shall be deemed to be an original, but such counterparts together shall constitute but
one and the same instrument.
-7-
4158-2018-5411.2
Section 4.15. No Boycott of Israel.
To the extent this Agreement is a contract for goods or services within the meaning of
Section 2271.002 of the Texas Government Code, as amended, the Bank hereby verifies that the
Bank does not boycott Israel and will not boycott Israel through the term of this Agreement. For
purposes of this verification, “boycott Israel” means refusing to deal with, terminating business
activities with, or otherwise taking any action that is intended to penalize, inflict economic harm
on, or limit commercial relations specifically with Israel, or with a person or entity doing
business in Israel or in an Israeli-controlled territory, but does not include an action made for
ordinary business purposes. The Bank is a company as defined in Section 808.001(2) of the
Texas Government Code, which means a for profit sole proprietorship, organization, association,
corporation, partnership, joint venture, limited partnership, limited liability partnership, or
limited liability company, including a wholly owned subsidiary, majority-owned subsidiary,
parent company, or affiliate of those entities or business associations that exists to make a profit.
Section 4.16. Compliance with Subchapter F of Chapter 2252 of the Texas Government
Code.
The Bank hereby verifies and warrants that at the time of execution and delivery of this
Agreement neither the Bank nor any wholly owned subsidiary, majority-owned subsidiary,
parent company or affiliate of the Bank (i) engages in business with Iran, Sudan or any foreign
terrorist organization as described in Chapters 806 or 807 of the Texas Government Code, or
Subchapter F of Chapter 2252 of the Texas Government Code, or (ii) is a company listed by the
Texas Comptroller under Sections 806.051, 807.051 or 2252.153 of the Texas Government
Code. The term “foreign terrorist organization” as used in this subsection (b) has the meaning
assigned to such term in section 2252.151 of the Texas Government Code.
Section 4.17. Texas Government Code 2274.002(a)(2).
The aggregate value of this Agreement is less than the dollar limitation set forth in
Section 2274.002(a)(2) of the Texas Government Code, as amended.
4158-2018-5411.2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
CITY OF SANGER, TEXAS
Mayor
Address: 502 Elm Street
Sanger, Texas 76266
Attest:
City Secretary
ZIONS BANCORPORATION, N.A.
By:
Kristen Billings, V.P. Municipal Finance
Address: 2501 North Harwood
Dallas, Texas 75201
Attention: Kristen Billings
With Additional Notice To:
ZMFU II, Inc.
One South Main, 17thth Floor
Salt Lake City, UT 84133
Attention: Kirsi Hansen
4158-2018-5411.2
EXHIBIT A-/
FEE SCHEDULE
None
4158-5373-9843.2
GENERAL CERTIFICATE
THE STATE OF TEXAS §
COUNTY OF DENTON §
We, the undersigned officers of the City of Sanger, Texas (the “City”), do hereby make
and execute this certificate for the benefit of the Attorney General of the State of Texas and all
other persons interested in the City’s $5,065,000 LIMITED TAX NOTE, SERIES 2023, dated as
of January 1, 2023 (the “Note”) now in the process of issuance, as follows:
(1)The City is a duly incorporated Home Rule City, operating and existing under the
Constitution and laws of the State of Texas and the City’s home rule charter, which charter has
not been changed or amended since the passage of the ordinance authorizing the issuance of the
City’s last obligations issued by the City and approval by the Attorney General of the State of
Texas which were the City of Sanger, Texas Combination Tax and Revenue Certificates of
Obligation, Series 2021A, dated May 1, 2021. According to the 2020 U.S. Census, the City’s
population was 8,839.
(2)The Note is being issued to provide all or part of the funds (i to finance the cost of
vehicles, (ii) to purchase equipment, (iii) to purchase three pieces of property for use by the
City, and (iv) for City-wide street, water, wastewater, and electric improvements and (v) to pay
the costs of issuing the Note.
(3)The following individuals are the duly elected and qualified officials of the City
holding the offices opposite their names:
Thomas Muir Mayor
Marissa Barrett Councilmember Place 1
Gary Bilyeu Councilmember Place 2
Dennis Dillon Councilmember Place 3
Allen Chick Councilmember Place 4
Victor Gann Councilmember Place 5
(4)Kelly Edwards is the duly appointed and qualified Secretary of the City.
(5)The Note was sold at a price equal to the par value thereof, to ZMFU II, Inc.
(6)That there has been no change in the City’s boundaries since the issuance of the
General Obligation Refunding Bond, Series 2021, which were the last obligations issued by the
City and approved by the attorney general, and no litigation or proceedings whatsoever
questioning the City’s boundaries or validity have been filed or are now pending in any court of
this state.
24158-5373-9843.3
(7)The City is not, and has never been, in default as to any covenant, condition or
obligation on any prior bonds, notes or other obligations payable from tax revenue.
(8)Attached as Exhibit A is a true, full, and correct debt service schedule for the
Note. Attached as Exhibit B is a true, full, and correct debt service schedule for all of the City’s
outstanding tax-supported debt, including the Note. The principal amount of the City’s total
outstanding tax-supported debt, including the Note is $52,637,209.50.
(9) The currently effective ad valorem tax appraisal roll of the City (the “Tax Roll”)
is the Tax Roll prepared and approved during the calendar year 2022 being the most recently
approved Tax Roll of the City; the taxable property in the City has been appraised, assessed, and
valued as required and provided by the Texas Constitution and Property Tax Code (collectively,
“Texas law”); the Tax Roll for the year has been submitted to the City Council of the City as
required by Texas law, and has been approved and recorded by the City Council; and according
to the Tax Roll for the year, the net aggregate taxable value of taxable property in the City (after
deducting the amount of all applicable exemptions required or authorized under Texas law),
upon which the annual ad valorem tax of the City has been or will be imposed or levied, is
$1,082,189,593.
(10) The City has appropriated from current funds on hand an amount of money
sufficient to pay the debt service payments scheduled to come due on the Note in 2023.
4158-5373-9843.2
EXHIBIT A
DEBT SERVICE SCHEDULE FOR THE NOTE
4158-5373-9843.2
EXHIBIT B
DEBT SERVICE SCHEDULE FOR THE CITY’S
OUTSTANDING DEBT INCLUDING THE NOTE
4157-8663-0979.1
SIGNATURE IDENTIFICATION AND
NO-LITIGATION CERTIFICATE
THE STATE OF TEXAS §
COUNTY OF DENTON §
We, the undersigned officers of the City of Sanger, Texas (the “City”), certify that we
officially signed, by our manual or facsimile signatures, on behalf of the City, the following
described Note, to wit:
CITY OF SANGER, TEXAS LIMITED TAX NOTE, SERIES 2023, dated as of
January 1, 2023 and aggregating $5,065,000 (the “Note”).
That the Note has been duly and officially executed by the undersigned with their manual
or facsimile signatures in the same manner appearing hereon, and the undersigned hereby adopt
and ratify their respective signatures in the manner appearing on the Note, whether in manual or
facsimile form, as the case may be, as their own signatures.
That on the date of such signing and on the date hereof, we were and are the duly chosen,
qualified, and acting officers authorized to execute the Note, and holding the official titles set
forth below opposite such signatures.
We further certify that no litigation is pending or, to the best of our knowledge,
threatened in any court to restrain or enjoin the issuance or delivery of the Note, or the levy,
collection, or application of the ad valorem taxes or revenues pledged or to be pledged to pay the
principal of and interest on the Note, or the pledge thereof, or in any way contesting or affecting
the validity of the Note, the ordinance adopted December 19, 2022, authorizing the issuance,
sale, and delivery of the Note (the “Ordinance”), or contesting the powers of the City or the titles
of its officers and their respective positions or their authority to act on the City’s behalf or the
authorization of the Note or the Ordinance.
12
12
4158-7051-7059.2
PURCHASE LETTER
December 19, 2022
City of Sanger, Texas
502 Elm Street
Sanger, Texas 76266
Orrick, Herrington & Sutcliffe LLP
609 Main Street, 40th Floor
Houston, Texas 77002
Raymond James & Associates, Inc,
5956 Sherry Lane, Suite 1900
Dallas, Texas 75225
Re: $5,065,000 City of Sanger, Texas Limited Tax Note, Series 2023 (the “Note”)
Ladies and Gentlemen:
This letter is intended to constitute a private placement letter and may be relied on by
each of you listed as addressees above. The undersigned (the “Purchaser”) has agreed to
purchase the referenced Note from the City of Sanger, Texas (the “City”) in the principal amount
of $5,065,000 at a price equal to par. The Purchaser acknowledges that (a) the Note is a limited
obligation of the City payable solely from annual ad valorem taxes levied, within the limits
prescribed by law, against all taxable property in the City; (b) Orrick, Herrington & Sutcliffe
LLP, Bond Counsel, has not undertaken steps to ascertain the accuracy or completeness of
information furnished to the Purchaser by the City with respect to the City or the Note, and the
Purchaser has not looked to such firm for, nor has such firm made, any representations to the
Purchaser with respect to that information; and (c) the Note (i) is not being registered under the
Securities Act of 1933 and is not being registered or otherwise qualified for sale under the “Blue
Sky” laws and regulations of any state, (ii) will not be listed on any stock or other securities
exchange and (iii) will not carry any rating from any rating service.
The Purchaser hereby represents and warrants that:
1. it is a wholly-owned subsidiary of a financial institution or other institutional
accredited investor as defined in the Securities Act of 1933, Regulation D, 17 Code of
Federal Regulations §230.501(a), accustomed to purchasing tax-exempt obligations in
large denominations;
2. it is a wholly-owned subsidiary of a bank and financial institution and, as such, has
knowledge and experience in financial and business matters that make it, without
24158-7051-7059.2
reliance on others, capable of evaluating the merits of the Note, the risks of
purchasing the Note, and its ability to bear the economic risks of such a purchase;
3. it (a) has been afforded the opportunity to make inquiry of the City and (b) has been
furnished with such financial, statistical, and other information with respect to the
City and the Note, including the Ordinance dated as of December 19, 2022 (the
“Ordinance”), as it has requested of the City as a result of the Purchaser having
attached significance thereto in order to enable it, without reliance upon others, to
make an informed decision concerning its purchase of the Note;
4. it intends to purchase the Note for its own portfolio and account (and not on behalf of
another) as evidence of a loan; and it intends to hold the Note to maturity, earlier
redemption, or mandatory tender, and has no present intention of reselling, or view to
making a distribution of, the Note, but the Purchaser reserves all rights under the
Ordinance, including the right to sell, pledge, transfer, convey, hypothecate, mortgage
or dispose of the Note at some future date, provided however, that the Purchaser will
not sell or otherwise transfer the Note (except to an affiliate of the Purchaser) unless
such sale or transfer is in compliance with applicable Federal securities laws,
including 17 Code of Federal Regulations § 240.15c2-12, as then in effect; the Note
may only be transferred to: (i) an affiliate of the Purchaser; (ii) a “Bank” as defined in
Section 3(a)(2) of the Securities Act of 1933 as amended (the “Securities Act”); (iii)
an institutional “Accredited Investor” as defined in Regulation D under the Securities
Act; or (iv) a “Qualified Institutional Buyer” as defined in Rule 144A under the
Securities Act;
5. it has satisfied itself that it may lawfully purchase the Note;
6. the Purchaser hereby verifies and warrants that at the time of execution and delivery
of this Purchaser Letter neither the Purchaser nor any wholly owned subsidiary,
majority-owned subsidiary, parent company or affiliate of the Purchaser (i) engages
in business with Iran, Sudan or any foreign terrorist organization as described in
Chapters 806 or 807 of the Texas Government Code, or Subchapter F of Chapter
2252 of the Texas Government Code, or (ii) is a company listed by the Texas
Comptroller under Sections 806.051, 807.051 or 2252.153 of the Texas Government
Code. The term “foreign terrorist organization” as used in this subsection (b) has the
meaning assigned to such term in section 2252.151 of the Texas Government Code;
7. to the extent this Purchaser Letter is a contract for goods or services within the
meaning of Section 2271.002 of the Texas Government Code, as amended, the
Purchaser hereby verifies that the Purchaser does not boycott Israel and will not
boycott Israel through the term of this agreement. For purposes of this verification,
“boycott Israel” means refusing to deal with, terminating business activities with, or
otherwise taking any action that is intended to penalize, inflict economic harm on, or
limit commercial relations specifically with Israel, or with a person or entity doing
business in Israel or in an Israeli-controlled territory, but does not include an action
made for ordinary business purposes. The Purchaser is a company as defined in
Section 808.001(2) of the Texas Government Code, which means a for-profit sole
proprietorship, organization, association, corporation, partnership, joint venture,
34158-7051-7059.2
limited partnership, limited liability partnership, or limited liability company,
including a wholly owned subsidiary, majority-owned subsidiary, parent company, or
affiliate of those entities or business associations that exists to make a profit; and
8. to the extent this Purchaser Letter represents a contract for goods or services for
which a written verification is required under Section 2274.002, Texas Government
Code (as added by Senate Bill 13 in the 87th Texas Legislature, Regular Session), the
Purchaser hereby verifies that it and its parent company, wholly- or majority-owned
subsidiaries, and other affiliates, if any, do not boycott energy companies and will not
boycott energy companies through the term of this Purchaser Letter. The foregoing
verification is made solely to enable Borrower to comply with such Section and to the
extent such Section does not contravene applicable Federal law. As used in the
foregoing verification, “boycott energy companies,” a term defined in Section
2274.001(1), Texas Government Code (as enacted by such Senate Bill) by reference
to Section 809.001, Texas Government Code (also enacted by such Senate Bill) shall
mean, without an ordinary business purpose, refusing to deal with, terminating
business activities with, or otherwise taking any action that is intended to penalize,
inflict economic harm on, or limit commercial relations with a company because the
company (A) engages in the exploration, production, utilization, transportation, sale,
or manufacturing of fossil fuel-based energy and does not commit or pledge to meet
environmental standards beyond applicable federal and state law; or (B) does
business with a company described by (A) above.
To the extent this Purchaser Letter represents a contract for goods or services for
which a written verification is required under Section 2274.002, Texas Government
Code (as added by Senate Bill 19 in the 87th Texas Legislature, Regular Session),
The Purchaser hereby verifies that it and its parent company, wholly- or majority-
owned subsidiaries, and other affiliates, if any, do not have a practice, policy,
guidance, or directive that discriminates against a firearm entity or firearm trade
association and will not discriminate through the term of this Purchaser Letter against
a firearm entity or firearm trade association. The foregoing verification is made
solely to enable Borrower to comply with such Section and to the extent such Section
does not contravene applicable Texas or federal law. As used in the foregoing
verification, ‘discriminate against a firearm entity or firearm trade association’ (A)
means, with respect to the firearm entity or firearm trade association, to (i) refuse to
engage in the trade of any goods or services with the firearm entity or firearm trade
association based solely on its status as a firearm entity or firearm trade association,
(ii) refrain from continuing an existing business relationship with the firearm entity or
firearm trade association based solely on its status as a firearm entity or firearm trade
association, or (iii) terminate an existing business relationship with the firearm entity
or firearm trade association based solely on its status as a firearm entity or firearm
trade association and (B) does not include (i) the established policies of a merchant,
retail seller, or platform that restrict or prohibit the listing or selling of ammunition,
firearms, or firearm accessories and (ii) a company’s refusal to engage in the trade of
any goods or services, decision to refrain from continuing an existing business
relationship, or decision to terminate an existing business relationship (aa) to comply
with federal, state, or local law, policy, or regulations or a directive by a regulatory
44158-7051-7059.2
agency or (bb) for any traditional business reason that is specific to the customer or
potential customer and not based solely on an entity’s or association’s status as a
firearm entity or firearm trade association. As used in the foregoing verification,
(b) ‘firearm entity’ means a manufacturer, distributor, wholesaler, supplier, or retailer
of firearms (i.e., weapons that expel projectiles by the action of explosive or
expanding gases), firearm accessories (i.e., devices specifically designed or adapted
to enable an individual to wear, carry, store, or mount a firearm on the individual or
on a conveyance and items used in conjunction with or mounted on a firearm that are
not essential to the basic function of the firearm, including detachable firearm
magazines), or ammunition (i.e., a loaded cartridge case, primer, bullet, or propellant
powder with or without a projectile) or a sport shooting range (as defined by Section
250.001, Texas Local Government Code), and (c) ‘firearm trade association’ means a
person, corporation, unincorporated association, federation, business league, or
business organization that (i) is not organized or operated for profit (and none of the
net earnings of which inures to the benefit of any private shareholder or individual),
(ii) has two or more firearm entities as members, and (iii) is exempt from federal
income taxation under Section 501(a), Internal Revenue Code of 1986, as an
organization described by Section 501(c) of that code.
8. the Purchaser is not a fiduciary for the City or broker, dealer, municipal securities
underwriter or municipal advisor. Purchaser has not provided, and will not provide,
financial, legal, tax, accounting or other advice to or on behalf of the City with
respect to the proposed issuance. The City shall represent in the documentation that
the City has sought and obtained financial, legal, tax, accounting and other advice
(including as it relates to structure, timing, terms and similar matters) with respect to
the proposed issuance from its financial, legal and other advisors (and not Purchaser)
to the extent that the City desired to obtain such advice.
ZMFU II, INC.
By:
Kristen Billings, Authorized Agent
d. Dollar Amount of Bond Premium, if any:
f. Dollar Amount of Bond Original Issue Discount, if any:
OFFICE OF THE ATTORNEY GENERAL
PUBLIC FINANCE DIVISION
Additional Transcript Requirements
Pursuant to Texas Government Code §1202.008
The following information is to be included in the transcript submitted to the Office of the Attorney General to obtain Attorney
General approval of the issuance of bonds or other obligations. This information has been designated by the Bond Review Board
as that to be collected pursuant to Texas Government Code §1202.008. If space is limited, please provide a specific cross-
reference to the page in the Final Official Statement.
Please submit excel copy of this form to brblgs@brb.texas.gov
A. Please provide the following information for each bond series as well as an additional copy of the Final Official Statement.
(Provide the requested information on this worksheet. The Bond Review Board does not receive the full transcript):
b. Name of Bond Issue:
c. Type of Issuer: (Governmental Entity, Conduit, Component or Related Entity)
Limited Tax Note, Series 2023
City of Sanger, Texas1. a. Name of the Governmental Entity:
Governmental Entity
30-Sep
g. Issuer Phone:
d. Issuer Fiscal Year End Date:
f. Issuer Address:
6. First Interest Payment Date:
List Conduit/Component/Related Entity/Other
N/A
2. a. Total Par Amount:
b. New Money Par:
c. Refunding Par:
g. If available, please email the DF2 file to brblgs@brb.state.tx.us.
$5,065,000.00
$5,065,000.00
e. Cash Premium (Competitive Sales, usually found in the Initial Purchasers Section),
if any:
1/17/2023
$0.00
$0.00
$0.00
1/1/2023
5. Closing Date (expected delivery date, on or about):
12. Derivative Products (Swaps, Interest Rate Management Agreements, etc.) - List any
derivatives associated with financing:
14. Credit Enhancement (including PSF guarantee):
13. Pledge: tax (ad valorem, other), revenue, sales tax revenue, combination tax & rev:
See Exhibit A attached
Yes
N/A
See Exhibit B attached
N/A
Ad valorem taxes
e. Issuer Contact Name and Title:Kelly Edwards, City Secretary
7/15/2023
See Exhibit A attached
1/17/20234. Date Interest Accrues from:
3. Dated Date:
7. Maturity Dates, Maturity Amounts, Coupon Rates, Prices or Yields (If no reoffering
yield (NRO) indicated, please provide yield separately.):
h. Issuer Email:citysecretary@sangertexas.org
940.458.7930
502 Elm Street, Sanger, Texas 76266
9. Mandatory Sinking Fund Redemption Dates:
8. Call Provisions, including Premiums, if any:
11. Do the bonds have a specific designation as qualified tax-exempt obligations?
10. Debt-Service Schedule (Principal and Interest, and Annual Totals, with the Fiscal Year
identified):
See Exhibit B attached
Updated August 2016
15. Ratings: Assigned to the issue/Underlying:
Rating Assigned to this
Issue/ Rating Outlook
Underlying Rating/
Rating Outlook
Moody's
S&P
Fitch
Other
Not Rated
B. Additional Information
9,368 / 2022 Source: MAC
If other please explain
N/A
N/A
21. Cash and Present Value Savings/Loss - If a refunding bond issue, please provide final
schedule of cash and present value savings or loss.
20. Refunded Obligations - If applicable, include a schedule of obligations refunded by
year, principal amount, and coupon.
19. Governmental Purchaser - please name purchaser (i.e. Texas Water Development
Board):
18. Net effective interest rate pursuant to Government Code Chapter 1204.005:
N/A
N/A
12/19/2022
3.70%
N/A
N/A
N/A
Private Placement
25. Upcoming Called Bond Election: Please provide an attached schedule which shows
date of election, purpose and amount by proposition.
24. Authorized but Unissued - For issues that require the use of voted bond authorization,
list all authorized but unissued voted authority available, if any.
23. If voter approved - Provide bond election date(s), original amount(s) authorized and
current amounts of principal and premium charged against voted authority.
22. Cash Defeasances - List all issues and maturities that have been cash defeased since the
last issue of public securities approved by the Attorney General.
17. Date of Sale:
16. Type of Sale: (Negotiated, Competitive, Private Placement, Other)
N/A
N/A
27. Commercial Paper Authorized - List all commercial paper programs, the amounts
authorized and the amounts currently outstanding.
30. If the issuer is an ISD, is any portion of the debt exempt from Texas Education
Agency Code 45.0031 (50-cent Debt test)?
29. Federal Program - If the debt is being issued under any direct special government
program; name the program and the amount of authority being used:
28. Population - Provide the most current available population data:
N/A
N/A
26. CABs and CIBs – If not provided in the OS, please provide the per annum bond
interest rates by maturity as shown in the bond order document. If provided in the OS, list
the page(s):
Updated August 2016
Service Firm One-Time Fee Annual Fees (1)
Bond Rating:Moody's
Standard & Poor's
Fitch
Other:
Other Costs of Issuance: (2)
Financial Advisor Government Capital Securities Corporation $44,000.00
Bond Counsel Orrick, Herrington & Sutcliffe LLP $9,500.00
Co Bond Counsel
Issuer Counsel
Bank Counsel
Disclosure Counsel
Paying Agent
Trustee Placement Agent $5,000.00
Remarketing Fees
Liquidity Fees
Accountant/CPA
Printing
POS/OS Posting
Attorney General's Fee $5,065.00
Issuer Fees
Escrow Agent
Escrow Verification Fees
Travel
TCEQ Fee
Bond Application Fee
TWDB Fee
Private Placement Fee
Contingency
Misc. Costs of Issuance: (3) Expenses, including MAC Texas $1,435.00
Total Costs of Issuance:$65,000.00 -
Credit Facility
Bond Insurance
Underwriting Spread:
Takedown
Management Fee
Underwriter Counsel
Spread Expenses
Total Underwriting Spread:(4)--
(2) Include all fees and expenses paid or reimbursed by the issuer.
(3) Provide all other costs of issuance and identify the service provider and associated fees.
(4) Include all marketing and selling costs including structuring (management) fee, takedown, underwriting risk fee and expenses.
31. Costs of Issuance - Provide the information below: (If final costs are materially different, please submit changes directly to the Texas
Bond Review Board, 512-463-1741 or fax 512-475-4802)
(1) Refers to any recurring costs of an issuance including fees for paying agent, remarketing agent, credit provider and other similar services
(may be expressed as a formula as appropriate).
Did Underwriter Pay Bond Insurance Fee? Yes or No
Did Underwriter Pay Underwriter Counsel’s Fee? Yes or No
No
No
Did Underwriter Pay Rating Fee? Yes or No No
Updated August 2016
UW Participants Firm
Senior Managing Underwriter
Other Underwriters
Person Completing Form:
Name:Hoang Vu
Firm:Orrick, Herrington & Sutcliffe LLP
Telephone:713.658.6400
E-mail:hvu@orrick.com
The information presented on this form is used by the Texas Bond Review Board for compiling outstanding debt information and related
costs of issuance for governmental issuers in Texas. For more information please see http://www.brb.texas.gov/local_debt.aspx
Updated August 2016
Exhibit A
EXHIBIT B
4142-0721-6195.2
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SANGER, TEXAS
LIMITED TAX NOTE, SERIES 2023
NUMBER DENOMINATION
I-1 $5,065,000.00
REGISTERED REGISTERED
INTEREST RATE: 3.700%
DATED DATE: January 1, 2023
ISSUANCE DATE: January 17, 2023
REGISTERED OWNER: ZMFU II, Inc.
PRINCIPAL AMOUNT: FIVE MILLION SIXTY-FIVE THOUSAND DOLLARS
THE CITY OF SANGER, TEXAS (the “City”), for value received, promises to pay to
the Registered Owner identified above or its registered assigns, upon presentation and surrender
of this Note at the designated corporate trust office of ZIONS BANCORPORATION, N.A. in
Dallas, Texas, or its successor (the “Paying Agent/Registrar”), as set forth in the following
schedule:
Payment
Date
Principal
Payment
01/15/2024 $ 646,000
01/15/2025 670,000
01/15/2026 695,000
01/15/2027 722,000
01/15/2028 749,000
01/15/2029 777,000
01/15/2030* 806,000
*final maturity
payable in any coin or currency of the United States of America which on the date of payment of
such principal is legal tender for the payment of debts due the United States of America prior to
maturity, calculated on the basis of a 360-day year composed of twelve 30-day months, from the
later of the Delivery Date specified above, or the most recent interest payment date to which
interest has been paid or duly provided for. Interest on this Note is payable on July 15, 2023 and
each January 15 and July 15 thereafter until maturity or prior redemption of this Note, by check
sent by United States mail, first class, postage prepaid, by the Paying Agent/Registrar to the
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4142-0721-6195.2
Registered Owner of record as of the close of business on the last day of the calendar month
immediately preceding the applicable interest payment date, as shown on the registration books
kept by the Paying Agent/Registrar. Any accrued interest payable at maturity shall be paid upon
presentation and surrender of this Note at the principal corporate trust office of the Paying
Agent/Registrar.
THIS NOTE IS ONE OF A DULY AUTHORIZED SERIES OF NOTES (the “Note”) in
the aggregate principal amount of $5,065,000 issued pursuant to an Ordinance adopted by the
City Council of the City on December 19, 2022 (the “Ordinance”), for the purpose of providing
all or part of the funds to pay contractual obligations incurred or to be incurred (i) to finance the
cost of vehicles, (ii) to purchase equipment, (iii) to purchase three pieces of property for use by
the City, and (iv) for City-wide street, water, wastewater, and electric improvements and (v) to
pay the costs of issuing the Note.
THIS NOTE shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Note either (i) is registered by the Comptroller of Public
Accounts of the State of Texas by due execution of the registration certificate endorsed hereon or
(ii) is authenticated by the Paying Agent/Registrar by due execution of the authentication
certificate endorsed hereon.
THE CITY RESERVES THE RIGHT at its option, to prepay the Note, in whole, at any
time at par plus accrued interest to the date of redemption.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the
date fixed for redemption by first class mail, postage prepaid, addressed to the registered owner
of each Note to be redeemed in whole at the address shown on the books of registration kept by
the Paying Agent/Registrar. When the Note has been called for redemption, and due provision
has been made to redeem the same, the principal amounts so redeemed shall be payable solely
from the funds provided for redemption, and interest which would otherwise accrue on the
amounts called for redemption shall terminate on the date fixed for redemption.
THIS NOTE IS TRANSFERABLE only upon presentation and surrender at the
designated corporate trust office of the Paying Agent/Registrar, accompanied by an assignment
duly executed by the Registered Owner or its authorized representative, subject to the terms and
conditions of the Ordinance. This Note may only be transferred to: (i) an affiliate of the
Registered Owner; (ii) a “Bank” as defined in Section 3(a)(2) of the Securities Act of 1933 as
amended (the “Securities Act”); (iii) an “Accredited Investor” as defined in Regulation D under
the Securities Act; or (iv) a “Qualified Institutional Buyer” as defined in Rule 144A under the
Securities Act.
THIS NOTE IS EXCHANGEABLE at the designated corporate trust office of the Paying
Agent/Registrar for a Note or Notes of the same maturity and interest rate and in the principal
amount of $1,000 or any integral multiple thereof, subject to the terms and conditions of the
Ordinance.
THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of
any Note to pay a sum sufficient to cover any tax or other governmental charge that may be
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4142-0721-6195.2
imposed in connection with the transfer or exchange of a Note. Any fee or charge of the Paying
Agent/Registrar for a transfer or exchange shall be paid by the City.
THE REGISTERED OWNER of this Note by acceptance hereof acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
IT IS HEREBY DECLARED AND REPRESENTED that this Note has been duly and
validly issued and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and to be done precedent to or in the issuance and delivery of this Note have
been performed, exist, and have been done in accordance with law; that the Note does not exceed
any constitutional or statutory limitation; and that annual ad valorem taxes sufficient to provide
for the payment of the interest on and principal of this Note, as such interest comes due and such
principal matures, have been levied and ordered to be levied, within the limits prescribed by law,
against all taxable property in the City and have been irrevocably pledged for such payment.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed
with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered
Owners of the Note assent by acceptance of the Note.
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4142-0721-6195.2
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
________________________________________ attorney to transfer the within Note on the
books kept for registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be guaranteed by a
member firm of the New York Stock Exchange
or a commercial bank or trust company.
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered owner
as shown on the face of this Note in every
particular, without any alteration, enlargement,
or change whatsoever.
* * *
4159-7118-0355.1
CITY OF SANGER
December 19, 2022
The Attorney General of Texas
Public Finance Section
300 West 15th, 7th Floor
Austin, Texas 78701
Note Registration Division
Comptroller of Public Accounts
111 East 17th Street
Austin, Texas 78774
Re: $5,065,000 City of Sanger, Texas Limited Tax Note, Series 2023
Dear Sir or Madam:
The captioned Note has been sent to your Office, and it is requested that you examine and
approve the Note in accordance with law. After such approval, please deliver the Note to the
Comptroller of Public Accounts for registration.
Enclosed herewith is a signed but undated copy of the SIGNATURE IDENTIFICATION
AND NO-LITIGATION CERTIFICATE for said Note. You are hereby authorized and directed
to date said Certificate concurrently with the date of approval of the Note. If any litigation or
contest should develop pertaining to the Note or any other matters covered by said Certificate,
the undersigned will notify you thereof immediately by telephone and telegraph. With this
assurance you can rely on the absence of any such litigation or contest, and on the veracity and
currency of said Certificate, at the time you approve the Note, unless you are notified otherwise
as aforesaid.
Dear Sir or Madam:
The Initial Note prepared in connection with the captioned financing will be delivered to
you by the Attorney General, when approved by him. We request that you register the Initial
Note on behalf of the City and, when so registered, mail it if not picked up by bond counsel,
along with the approving opinion of the Attorney General and the Comptroller's registration
certificates, by overnight delivery to bond counsel to the City, Orrick, Herrington & Sutcliffe
LLP, 609 Main Street, 40th Floor, Houston, Texas, 77002, Attn: Hoang Vu, for further handling
under our instructions to them.
4159-2084-8707.2
TAX CERTIFICATE
I, the undersigned officer of the CITY OF SANGER, TEXAS (together with any
successor to its duties and functions, the “Issuer”) make this certification for the benefit of all
persons interested in the exclusion from gross income and certain other treatment for federal
income tax purposes of the interest to be paid on the Issuer’s Limited Tax Note, Series 2023 (the
“Note”) in the aggregate principal amount of $5,065,000.00, which are being issued and
delivered simultaneously with the delivery of this certificate (the “Certificate”). I do hereby
certify as follows:
1.General. I am the duly chosen, qualified and acting officer of the Issuer for the
office shown below my signature. In such capacity, I am charged, along with others, with
responsibility for issuing the Note. I am familiar with the facts, estimates and expectations
certified herein, and I am duly authorized to execute and deliver this Certificate. I am familiar
with the provisions of the ordinance adopted on December 19, 2022, authorizing the issuance of
the Note (the “Ordinance”), and particularly the provisions thereof relating to the treatment of
the Note and the interest thereon for federal income tax purposes. I am aware of the provisions
of the Internal Revenue Code of 1986, as amended (the “Code”), including Sections 103 and 141
through 150 thereof, and the Treasury Regulations (the “Regulations”) promulgated under the
Code. This Certificate is being executed and delivered pursuant to the relevant provisions of the
Code and Sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-11, 1.149(d), 1.149(g)-1,
1.150-1 and 1.150-2 of the Regulations. Certain terms used herein have the same meanings as
given to those terms in the Code and the Regulations. Capitalized terms used in this Certificate
(unless otherwise indicated herein) shall have the meanings ascribed to them in the Ordinance.
2.Reasonable Expectations. As an officer of the Issuer responsible for issuing the
Note, the undersigned hereby certifies, in good faith, that the Issuer’s expectations, as of the
Issue Date (as defined herein), regarding the amount and use of the gross proceeds of the Note
and other matters relevant to the treatment of interest on the Note for federal income tax
purposes are accurately and completely stated herein, that all of such expectations are reasonable
and are based on the facts and estimates stated in this Certificate, that all of the facts and
estimates stated in this Certificate are accurate. The undersigned has relied on certain
representations made by ZMFU II, Inc., (the “Purchaser”) in the Certificate of Purchaser,
attached hereto as Exhibit A. The undersigned is aware of no other facts, estimates or
circumstances which would indicate that any of the expectations stated herein are not reasonable.
3.Description of Governmental Purposes. The Issuer is issuing the Note pursuant
to the Ordinance to provide funds, which will be used (i) to finance the cost of vehicles, (ii) to
purchase equipment, (iii) to purchase three pieces of property for use by the City, and (iv) for
City-wide street, water, wastewater, and electric improvements (v) to pay the costs of issuing the
Note. (collectively, the “Project”).
4.Proceeds of the Note. The sales proceeds from the sale of the Note received by
the Issuer is $5,065,000, which represents the aggregate principal amount of the Note.
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4159-2084-8707.2
5.Use of Proceeds of the Note. The sales proceeds from the sale of the Note
received by the Issuer will be expended and applied by the Issuer as follows:
(a)Proceeds of the Note in the amount of $5,000,000 will be used by the
Issuer to pay costs of the Project.
(b)Proceeds of the Note in the amount of $65,000 will be used by the Issuer
to pay costs of issuance of the Note.
6.Pre-Issuance Accrued Interest. Interest on the Note begins to accrue on the
Issue Date; therefore, the Note are being issued without pre-issuance accrued interest.
7.Investment Proceeds. The Issuer has estimated the total amount of investment
proceeds to be received with respect to the Note Earnings on the investment of proceeds of the
Note described in paragraph 5 will be used in addition to the amounts described in paragraph 5 to
pay costs associated with the Project. The total cost of the Project is expected to equal or exceed
the sum of the amount described in paragraph 5 and the investment earnings thereon which are to
be used to pay costs of the Project.
8.Replacement Proceeds. There are no amounts on hand, and there are no
amounts expected to be received, other than amounts identified herein as proceeds of the Note
and amounts to be held in the Debt Service Fund for the payment of debt service on the Note (as
discussed in paragraph 12) which have or will have at any time a sufficiently direct nexus to the
Note or to any governmental purpose of the Note to conclude that such amounts would have
been used for that governmental purpose if the proceeds of the Note were not used or to be used
for that governmental purpose. More specifically --
(a)Sinking Funds and Pledged Funds. Other than the Debt Service Fund
and the amounts and investments on deposit therein from time to time, there are not now
and will not be at any time while the Note are outstanding --
(i)any debt service fund, reserve fund, replacement fund, any similar
fund, or any amount or investment reasonably expected to be used, directly or
indirectly (such as, by the generation of income to be used), to pay principal or
interest on the Note; and
(ii)any fund, amount, or investment that is directly or indirectly
pledged to pay principal or interest on the Note. A pledge includes, but is not
limited to, any arrangement, regardless of its form, which provides reasonable
assurance that the amount will be available to pay principal or interest, even if the
Issuer encounters financial difficulty. A pledge to a guarantor or an agreement to
maintain an amount at a particular level or balance for the direct or indirect
benefit of bondholder or a guarantor would constitute a pledge for this purpose.
(b)No Other Replacement Proceeds. There will be no other replacement
proceeds allocable to the Note. Based on the reasonable expectations of the Issuer as of
the date hereof, the term of the Note is not longer than, and the Issuer will not allow the
Note to remain outstanding longer than, is reasonably necessary for the governmental
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4159-2084-8707.2
purposes for which the Note are being issued. The weighted average maturity of the Note
does not exceed 120 percent of the reasonably expected economic life of the capital
projects being financed by the Note, determined in the same manner as provided under
Section 147(b) of the Code. In addition, none of the proceeds of the Note will be used to
finance working capital expenditures.
9.No Overissuance. Based on the expectations set forth in the preceding
paragraphs, the amount of the proceeds from the issuance of the Note, plus all investment
proceeds to be received with respect to the Note, does not exceed by any amount, the amount
required for the governmental purposes for which the Note are being issued, as described in
paragraph 3 above.
10.Temporary Period Requirements for the Note.
(a)Pre-Issuance Accrued Interest. Interest on the Note begins to accrue on
Issue Date; therefore, the Note is being issued without pre-issuance accrued interest.
(b)Expenditure Test. The Issuer expects at least 85 percent of the net sale
proceeds of the Note will have been expended prior to the date that is three years from
the date hereof for costs of the Project. All net sale proceeds of the Note not expended
prior to the date that is three years from the date hereof, will be invested on and after such
date until final expenditure at a yield (as defined in paragraph 14) which is not materially
higher than the yield on the Note, except as set forth in paragraph 17 below.
(c)Time Test. The Issuer has incurred or will incur within six months of the
date hereof a substantial binding obligation to a third party pursuant to which the Issuer is
obligated to expend at least five percent of the net sale proceeds of the Note on the
Project.
(d)Due Diligence. The Issuer expects that the Project will proceed with due
diligence to completion and that the net sale proceeds of the Note will be expended on the
Project with reasonable dispatch.
(e)Investment Proceeds. The Issuer expects that all amounts derived from
the investment of monies received from the sale of the Note and from the reinvestment of
such investment proceeds will be expended within three years from the date hereof or
within one year after receipt of such investment income, whichever is later. All
investment proceeds of the Note not expended prior to such date will be invested on and
after such date until final expenditure at a yield which is not materially higher than the
yield on the Note, except as provided in paragraph 17 below.
The term “net sale proceeds” shall mean any amount actually or constructively received
from the sale of the Note, including amounts constituting the underwriter’s discount or
compensation and accrued interest, other than pre-issuance accrued interest, less amounts
invested as part of a reasonably required reserve or replacement fund or as part of a minor
portion for the Note.
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4159-2084-8707.2
11.Flow of Funds. Under the Note, the Issuer is obligated to assess and collect taxes
in an amount sufficient to pay debt service on the Note. All taxes assessed and collected by the
Issuer for and on account of the Note will be deposited into the Debt Service Fund (as defined
below).
12.Debt Service Fund. The Issuer created, pursuant to the Ordinance,the Debt
Service Fund to be used primarily to achieve a proper matching of taxes and debt service on the
Note within each bond year. The Issuer expects that the taxes collected each year, and amounts
received from investment of moneys held in the Debt Service Fund, will be sufficient to pay debt
service each year on the Note. The portion of the Debt Service Fund which will be depleted by
the payment of debt service on the Note at least once each bond year, except for a reasonable
carryover amount not to exceed the greater of (a) one year’s earnings on the Debt Service Fund
for the immediately preceding bond year or (b) one-twelfth of the principal and interest payments
on the issue for the immediately preceding bond year, will constitute a bona fide Debt Service
Fund and will be treated as a separate fund (the “Bona Fide Portion”) for purposes of this
Certificate. Amounts, other than proceeds of the Note, remaining in the Debt Service Fund, after
the annual payment of all principal of and interest and premium, if any, on the Note, other than
the reasonable carryover amount described in the preceding sentence will be treated for purposes
of this Certificate as a separate fund (the “Reserve Portion”). The Issuer reasonably expects that
the sum of any amounts in the Debt Service Fund which (i) are allocable to such Reserve Portion
or (ii) are allocable to the Bona Fide Portion, but are not spent for the payment of debt service on
the Note within 13 months after the date of receipt of such amount, will not exceed the least of
(x) 10 percent of the Issue Price (as defined in paragraph 13), (y) the maximum annual principal
and interest requirements on the Note, or (z) 125 percent of the average annual principal and
interest requirement on the Note, at any time so long as the Note is outstanding. To the extent
any such accumulations exceed such amount, the excess amount will be invested at a yield not in
excess of the yield on the Note, except as set forth in paragraph 17 below.
13.Issue Price. The term “Issue Price” with respect to the entire issue of Note is set
forth in the Certificate of Purchaser attached as Exhibit A and incorporated herein by reference
without taking into account any costs of issuance or pre-issuance accrued interest.
14.Yield on the Note. For purposes of this Certificate, the term “yield” shall have
the meaning ascribed to it in Section 148(h) of the Code and the Regulations in effect thereunder
and, when used with respect to the Note, shall mean that interest rate which when used as a
discount factor to compute the present value as of the Issue Date of all scheduled payments of
principal of and interest on the Note produces an amount equal to (i) the Issue Price of the Note,
plus (ii) pre-issuance accrued interest on the Note as of the Issue Date. Yield on the Note shall
not take into account or reflect any underwriter’s discount or cost of issuance of the Note. For
purposes hereof, yield is and shall be calculated on the basis of a 360-day year with interest
compounded annually.
15.Other Issues. There is no Note issued by the Issuer or any related party of the
Issuer which (a) are sold at the same time as the Note (within 15 days), (b) are reasonably
expected to be paid from the same source of funds as the Note and (c) have been or will be sold
pursuant to the same plan of financing as the Note.
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4159-2084-8707.2
16.No Other Sinking Funds. Other than the Debt Service Fund, there are no other
funds or accounts comprised of investment property established by and on behalf of the Issuer
(a) which are expected to be used, or expected to generate earnings to be used, to pay debt
service on the Note, or which are reserved or pledged as collateral for payment of debt service on
the Note and (b) for which there is reasonable assurance that amounts therein will be available to
pay debt service on the Note if the Issuer encounters financial difficulties. Use of amounts in the
Interest and Sinking Fund is described above. There is no other fund established, or to be
created or established, which would be treated as a sinking fund with respect to the Note.
17.Minor Portion. The Issuer expects that the gross proceeds of the Note, including
all proceeds received with respect to the Note and all investment proceeds received on such
amounts, and all other amounts pledged or anticipated to be used to pay principal of and interest
on the Note, other than amounts representing a portion of the Bona Fide Portion of the Debt
Service Fund, will be expended in accordance with paragraphs 5 and 10 above. To the extent
that such amounts remain unexpended or are otherwise on hand following the periods set forth in
paragraph 10 above exceeds the amount specified in this paragraph, the Issuer will invest such
amounts, other than a minor portion in an amount not exceeding the lesser of 5 percent of the
sale proceeds of the Note or $100,000 in the aggregate, at a yield not materially higher than the
yield on the Note.
18.Compliance with Rebate Requirements.
(a)The Issuer has covenanted in the Ordinance that, unless the Note meets an
exception to the rebate requirement, it will take all necessary steps to comply with the
requirement that rebatable arbitrage earnings on the investment of the gross proceeds of
the Note, within the meaning of Section 148(f) of the Code, be rebated to the federal
government. Specifically, the Issuer will (i) maintain separate records regarding the
amount and timing of disbursements of proceeds of the Note (ii) maintain records
regarding the investment of the gross proceeds of the Note as may be required to
calculate the amount earned on the investment of the gross proceeds of the Note which
are part of a reasonably required reserve or replacement fund separately from records of
amounts in other funds or accounts maintained for the Note amounts on deposit in the
funds and accounts of the Issuer allocable to other bond issues of the Issuer or moneys
which do not represent gross proceeds of any obligation of the Issuer (iii) calculate at
such times as required by applicable Regulations, the rebatable amount earned from the
investment of the gross proceeds of any obligation of the Issuer, (iv) calculate at such
times as required by applicable Regulations, the rebatable amount earned from the
investment of the gross proceeds of the Note which are part of a reasonably required
reserve or replacement fund, and (v) pay, not less often than every fifth anniversary date
of the delivery of the Note or on such other dates as permitted or required by applicable
Regulations, all amounts required to be rebated and all penalties required to be paid to the
federal government. The Issuer acknowledges that the purposes of compliance with
Section 148 of the Code, gross proceeds of the Note must be accounted for on the basis of
a reasonable, consistently applied method of accounting, not employed in whole or in
part as an artifice or device. The Issuer will employ accountants or other persons with
expertise in performing the rebate calculations as is necessary to insure compliance with
the Code. The Issuer will employ legal counsel as is necessary to resolve the interpretive
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4159-2084-8707.2
issues involved in complying with the rebate requirements of the Code. Further, the
Issuer will not indirectly pay any amount otherwise payable to the federal government
pursuant to the foregoing requirements to any person other than the federal government
by entering into any investment arrangement with respect to the gross proceeds of the
Note. In the event that the Issuer fails to comply with the rebate requirements of the
Code, the Issuer agrees to take all steps available under the Code to bring the Note into
compliance with the Code; such steps include paying any penalty, interest or other
amounts which will allow the Issuer to return to compliance with the rebate requirements
of the Code. If the Issuer is required to pay rebate or other amounts, such as penalties
and interest, to the United States with respect to the Note pursuant to Section 148(f) of
the Code in order to prevent the Note from constituting arbitrage bonds or being
otherwise classified or treated such that interest on the Note would not be excludable
from the gross income of the holders thereof for federal income tax purposes, the Issuer
will timely make such payments from available funds of the Issuer and the Issuer
reasonably expects that it will have the ability to make such payments from available
funds of the Issuer in the event such payments become necessary. The undersigned
reasonably expects that the Issuer will fulfill its covenants and representations in this
regard.
(b) Two Year Construction Exception
The Issuer expects to expend the available construction proceeds for
governmental purposes of the issue in accordance with the following schedule measured
from the issue date:
(i)At least 10 percent within 6 months;
(ii)At least 45 percent within 12 months;
(iii)At least 75 percent within 18 months; and
(iv)100 percent within 2 years.
19.Not a Refunding. No portion of the proceeds of the Note are expected to be used
to pay any interest on or principal of any issue of governmental obligations other than the Note.
20.Not a Reimbursement. Except for certain preliminary expenditures, if any (as
defined in Section 1.150-2(f)(2) of the Regulations) not exceeding 20 percent of the Issue Price
of the Note, none of the proceeds of the Note will be allocated to, or otherwise used, to
reimburse any expenditure paid, either actually or constructively, by the Issuer prior to the Issue
Date.
21.Not a Hedge Bond. Not more than 50 percent of the proceeds of the Note will be
invested in non-purpose investments (as defined in Section 148(f)(6)(A) of the Code) having a
substantially guaranteed yield for four years or more within the meaning of
Section 149(g)(3)(A)(ii) of the Code, and the Issuer reasonably expects that at least 85 percent of
the spendable proceeds of the Note will be used to carry out the governmental purposes of the
Note within the three-year period beginning on the date the Note was issued.
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4159-2084-8707.2
22.No Change In Use. The Issuer does not expect to dispose of any portion of the
Project related to the Note, or to change the use of the proceeds of the Note while any of the
Note is outstanding.
23.No Abusive Arbitrage Device. The Note is not and will not be a part of an issue
in which an abusive arbitrage device (as defined in Section 1.148-10(a) of the Regulations) is
used. Without limiting the foregoing, the Note is not and will not be a part of a transaction or
series of transactions that attempts to circumvent the provisions of Section 148 of the Code and
the Regulations, by (i) enabling the Issuer to exploit the difference between tax-exempt and
taxable interest rates to gain a material financial advantage, and (ii) increasing the burden on the
market for tax-exempt obligations. In this regard, the Issuer issued the Note for the primary
purpose of accomplishing the bona fide governmental purposes set forth in paragraph 3 of this
Certificate. Based on all the facts and circumstances, the Issuer has not issued the Note in an
amount higher than is reasonably necessary to accomplish the governmental purposes of the
Note, the Issuer has not issued the Note earlier than is reasonably necessary to accomplish the
governmental purposes of the Note and the Issuer is not allowing the Note to remain outstanding
longer than is reasonably necessary to accomplish the governmental purposes of the Note. The
Issuer would have issued the Note regardless of any arbitrage benefit, which it may realize in
connection with the Note. In fact, the Issuer reasonably expects that even if the Note was not
tax-exempt obligations and if market rates of interest on taxable and tax-exempt obligations were
equal to each other and to the rates at which the Note is in fact now being issued, the Issuer
would have issued the Note, notwithstanding the loss of any opportunity to borrow at lower
tax-exempt rates and invest at higher taxable rates.
(a)No Impermissible Sinking Fund. No portion of the Note has a maturity
determined primarily for the purpose of creating a sinking fund with respect to the Note
the yield on which will be blended with the yield on the investment of other proceeds of
the Note to reduce the negative arbitrage related to such investment.
(b)No Working Capital. Except for an amount that does not exceed
5 percent of the Sale Proceeds of the Note (and that is directly related to capital
expenditures financed by the Note), the Issuer will only expend proceeds of the Note for
(i) costs that would be chargeable to the capital accounts of the Project if the Issuer’s
income were subject to federal income taxation and (ii) interest on the Note in an amount
that does not cause the aggregate amount of interest paid on all of the Note to exceed that
amount of interest on the Note that is attributable to the period that commences on the
date hereof and ends on the later of (A) the date that is three years from the issue date of
the Note or (B) the date that is one year after the date on which the Project is placed in
service.
(c)No Sale of a Conduit Loan. No portion of the gross proceeds of the Note has
been or will be used to acquire, finance or refinance a conduit loan.
24.Allocations and Accounting. The proceeds of the Note will be allocated to
expenditures not later than 18 months after the later of the date the expenditure is made or the
date the Project is placed in service, but in no event later than the date that is 60 days after the
fifth anniversary of the date hereof or the retirement of the last Note, if earlier. The allocation of
-8-
4159-2084-8707.2
proceeds will be made by employing the direct-tracing method of accounting, unless the Issuer
elects otherwise.
25.No Arbitrage. On the basis of the foregoing facts, estimates and circumstances,
it is expected that the proceeds of the Note will not be used in a manner that would cause the
Note to be an “arbitrage bond” within the meaning of Section 148 of the Code and the
Regulations. To the best of the knowledge and belief of the undersigned, there are no other facts,
estimates or circumstances that would materially change such expectations.
26.No Private Use, Payments or Loan Financing.
(a)General. The Issuer reasonably expects, as of the date hereof, that no
action or event during the entire stated term of the Note will cause either the “private
business tests” or the “private loan financing test,” as such terms are defined in the
Regulations, to be met.
(i)No portion of the proceeds of the Note will be used in a trade or
business of a nongovernmental person. For purposes of determining use, the
Issuer will apply rules set forth in applicable Regulations, Revenue Procedures
and Notices promulgated by the Internal Revenue Service, including, among
others, the following rules: (A) any activity carried on by a person other than a
natural person or a state or local governmental unit will be treated as a trade or
business of a nongovernmental person; (B) the use of all or any portion of the
proceeds of the Note is treated as the direct use of proceeds; (C) a
nongovernmental person will be treated as a private business user of proceeds of
the Note as a result of ownership, actual or beneficial use of the proceeds pursuant
to a lease, or a management or incentive payment contract, or certain other
arrangements such as a take-or-pay or other output-type contract; and (D) the
private business use test is met if a nongovernmental person has special legal
entitlements to use directly or indirectly the proceeds of the Note.
(ii)The Issuer has not taken and will not take any deliberate action that
would cause or permit the use of any portion of the proceeds of the Note to
change such that such portion will be deemed to be used in the trade or business
of a nongovernmental person for so long as any of the Note remain outstanding
(or until an opinion of nationally recognized bond counsel is received to the effect
that such change in use will not adversely affect the excludability from gross
income for federal income tax purposes of interest payable on the Note). For this
purpose any action within the control of the Issuer is treated as a deliberate action.
A deliberate action occurs on the date the Issuer enters into a binding contract
with a nongovernmental person for use of the proceeds of the Note that is not
subject to any material contingencies. The Issuer has not contracted in any
manner with any company, firm or other person or entity to operate and/or
maintain the Project, or all or any part of the Project, for and on behalf of the
Issuer. The Issuer does not expect to enter into any contract for the operation,
maintenance or management of the Projects or all or part of any one, except for
contracts complying with Notice 2016-44.
-9-
4159-2084-8707.2
(iii)No portion of the proceeds of the Note will be directly or indirectly
used to make or finance a loan to any person other than a state or local
governmental unit.
(b)Dispositions of Personal Property in the Ordinary Course.
Dispositions of personal property financed with any portion of the proceeds of the Note
will occur in the ordinary course of an established governmental program and will satisfy
the following requirements:
(i)The weighted average maturity of the portion of the Note financing
personal property is not greater than 120 percent of the reasonably expected actual
use of such personal property for governmental purposes;
(ii)The reasonably expected fair market value of such personal
property on the date of disposition will not be greater than 25 percent of its cost;
(iii)Such personal property will no longer be suitable for its
governmental purposes on the date of disposition; and
(iv)Such personal property will no longer be suitable for its
governmental purposes on the date of disposition; and
(v)The Issuer is required to deposit amounts received from such
disposition in a commingled fund with substantial tax or other governmental
revenues and the Issuer reasonably expects to spend such amounts on
governmental programs within 6 months from the date of commingling.
27.Weighted Average Maturity. The weighted average maturity of the Note is
4.1421 years which is the sum of the products of the Issue Price of the Note and the number of
years to maturity (determined separately for the Note and taking into account mandatory
redemptions), divided by the aggregate sale proceeds of the Note.
28.Reserved.
[SIGNATURE PAGE FOLLOWS]
-10-
4159-2084-8707.2
WITNESS MY HAND, as of this January 17, 2023.
CITY OF SANGER, TEXAS
By:
Mayor
EXHIBIT A Certificate of Purchaser
4159-2084-8707.2
EXHIBIT A
CERTIFICATE OF PURCHASER
The undersigned hereby certifies with respect to the sale of the City of Sanger, Texas
Limited Tax Note, Series 2023 (the “Note”), as follows:
1.The undersigned is a duly authorized agent of ZMFU II, Inc. (the “Purchaser”), that
purchased the Note from the City of Sanger, Texas (the “Issuer”). In this capacity, the
undersigned is familiar with the facts stated herein.
2.The Note was not publicly offered, the Purchaser purchased the Note for its own
account without a current intent to resell it. The terms of the sale and purchase of the Note have
been established through negotiations between the Issuer and the Purchaser in an arm’s length
transaction. In our opinion, taking into consideration the private, direct-purchase nature of the
transaction, the purchase price of the Note reflects the fair market value of the Note as of the date
the interest rate was established. The Issue Price of the Note is equal to $5,065,000. The Note
was issued without pre-issuance accrued interest.
The Purchaser hereby authorizes the Issuer to rely on the statements made herein in
connection with making the representations set forth in the Tax Certificate to which this
Certificate is attached and in connection with compliance by the Issuer with the provisions of the
Code regarding the exclusion from gross income of the interest on the Note. Further, we hereby
authorize Orrick, Herrington & Sutcliffe LLP, Bond Counsel to rely on the statements made
herein in connection with its opinion that interest on the Note is excludable from gross income
for federal income tax purposes.
4159-2084-8707.2
EXECUTED and DELIVERED as of January 17. 2023.
ZMFU II, Inc.
By:
Kristen Billings, Authorized Agent
Form 8038-G
(Rev. October 2021)
Department of the Treasury
Internal Revenue Service
Information Return for Tax-Exempt Governmental Bonds
"Under Internal Revenue Code section 149(e)"
"See separate instructions."
Caution: If the issue price is under $100,000, use Form 8038-GC.
"Go to www.irs.gov/F8038G for instructions and the latest information.
OMB No. 1545-0047
Part I Reporting Authority Check box if Amended Return "
1 Issuer’s name 2 Issuer’s employer identification number (EIN)
3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions)3b Telephone number of other person shown on 3a
4 Number and street (or P.O. box if mail is not delivered to street address)Room/suite 5 Report number (For IRS Use Only)
3
6 City, town, or post office, state, and ZIP code 7 Date of issue
8 Name of issue 9 CUSIP number
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information 10b Telephone number of officer or other
employee shown on 10a
Part II Type of Issue (Enter the issue price.) See the instructions and attach schedule.
11 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . .12
13 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
14 Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
15 Environment (including sewage bonds) . . . . . . . . . . . . . . . . . . . .15
16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
17 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
18 Other. Describe "18
19 a If bonds are TANs or RANs, check only box 19a . . . . . . . . . . . . . . . "
b If bonds are BANs, check only box 19b . . . . . . . . . . . . . . . . . . "
20 If bonds are in the form of a lease or installment sale, check box . . . . . . . . . "
Part III Description of Bonds. Complete for the entire issue for which this form is being filed.
21
(a) Final maturity date (b) Issue price (c) Stated redemption
price at maturity
(d) Weighted
average maturity (e) Yield
$ $ years %
Part IV Uses of Proceeds of Bond Issue (including underwriters’ discount)
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . .22
23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . . . . . . .23
24 Proceeds used for bond issuance costs (including underwriters’ discount) 24
25 Proceeds used for credit enhancement . . . . . . . . . . . .25
26 Proceeds allocated to reasonably required reserve or replacement fund .26
27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . . .27
28 Proceeds used to refund prior taxable bonds. Complete Part V . . . .28
29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . .29
30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . .30
Part V Description of Refunded Bonds. Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . . . "years
32 Enter the remaining weighted average maturity of the taxable bonds to be refunded . . . . "years
33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) . ."
34 Enter the date(s) the refunded bonds were issued " (MM/DD/YYYY)
For Paperwork Reduction Act Notice, see separate instructions.Cat. No. 63773S Form 8038-G (Rev. 10-2021)
City of Sanger, Texas
502 Elm Street
Sanger, Texas 76266 01/17/2023
City of Sanger, Texas Limited Tax Note, Series 2023 N/A
Kelly Edwards, City Secretary 940.458.7930
**see below 5,065,000
01/15/2030 5,065,000 5,065,000 4.1421 3.7000
5,065,000
65,000
65,000
5,000,000
Form 8038-G (Rev. 10-2021)Page 2
Part VI Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . .35
36 a 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 " (MM/DD/YYYY)
c Enter the name of the GIC provider "
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units . . . . . . . . . . . . . . . . . . . . . . . .37
38 a 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 bond " (MM/DD/YYYY)
c Enter the EIN of the issuer of the master pool bond "
d Enter the name of the issuer of the master pool bond "
39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box . . . . "
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . "
41 a If the issuer has identified a hedge, check here "and enter the following information:
b Name of hedge provider "
c Type of hedge "
d Term of hedge "
42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . "
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . "
44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . "
45a If some portion of the proceeds was used to reimburse expenditures, check here "and enter the amount
of reimbursement . . . . . . . . . . . . . . "
b Enter the date the official intent was adopted ""(MM/DD/YYYY)
Signature
and
Consent
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge
and belief, they are true, correct, and complete. I further declare that I consent to the IRS’s disclosure of the issuer’s return information, as necessary to
process this return, to the person that I have authorized above.
Signature of issuer’s authorized representative Date Type or print name and title
Paid
Preparer
Use Only
Print/Type preparer’s name Preparer’s signature Date Check if
self-employed
PTIN
Firm’s name "
Firm’s address "
Firm’s EIN "
Phone no.
Form 8038-G (Rev. 10-2021)
Thomas Muir, Mayor
Hoang T. Vu
Orrick, Herrington & Sutcliffe LLP
609 Main Street, 40th Floor, Houston, Texas 77002
713.658.6400
Post Office Box 12548, Austin, Texas 78711- 254 8 • (512) 463-2100 • www.texasattorneygeneral.gov
January 12, 2023
THIS IS TO CERTIFY that the City of Sanger, Texas (the "Issuer"),
has submitted the City of Sanger, Texas Limited Tax Note, Series 2023 (the
"Note") in the principal amount of $5,065,000 for approval. The Note is dated
January 1, 2023, numbered I-1, and was authorized by Ordinance No. 12-33-
22 of the Issuer passed on December 19, 2022.
The Office of the Attorney General has examined the law and such certified
proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations
of the Issuer contained in the certified proceedings and other certifications of public officials
furnished to us without undertaking to verify the same by independent investigation.
We express no opinion relating to the official statement or any other offering material
relating to the Note.
Based on our examination, we are of the opinion, as of the date hereof and under
existing law, as follows:
(1) The Note has been issued in accordance with law and is a valid and binding
obligation of the Issuer.
(2) The Note is payable from the proceeds of an annual ad valorem tax levied,
within the limits prescribed by law, against all taxable property in the Issuer.
Therefore, the Note is approved.
No. 73039
Book No. 2023-A
MAT
*See attached Signature Authorization
4159-5440-3139.2
Orrick, Herrington & Sutcliffe LLP
609 Main Street
40th Floor
Houston, TX 77002=3106
+1 713 658-6400
orrick.com
January 17, 2023
ZMFU II, Inc.
1 South Main Street
Suite 1700
Salt Lake City, Utah 84133
City of Sanger, Texas
502 Elm Street
Sanger, Texas 76266
City of Sanger, Texas
Limited Tax Note, Series 2023
(Final Opinion)
Ladies and Gentlemen:
We have acted as Bond Counsel for City of Sanger, Texas (the “City”) in connection with
the City’s Limited Tax Note, Series 2023 in the original principal amount of $5,065,000 (the
“Note”) issued pursuant to an Ordinance adopted by the City Council on December 19, 2022 (the
“Ordinance”).
In such connection, we have reviewed the Ordinance, certificates of the City, and others,
and such other documents, opinions and matters to the extent we deemed necessary to render the
opinions set forth herein.
The opinions expressed herein are based on an analysis of existing laws, regulations,
rulings and court decisions and cover certain matters not directly addressed by such authorities.
Such opinions may be affected by actions taken or omitted or events occurring after the date hereof.
We have not undertaken to determine, or to inform any person, whether any such actions are taken
or omitted or events do occur or any other matters come to our attention after the date hereof.
Accordingly, this letter speaks only as of its date and is not intended to, and may not, be relied
upon or otherwise used in connection with any such actions, events or matters. Our engagement
with respect to the Note has concluded with its issuance, and we disclaim any obligation to update
this letter. We have assumed the genuineness of all documents and signatures presented to us
(whether as originals or as copies) and the due and legal execution and delivery thereof by, and
validity against, any parties other than the City. We have assumed, without undertaking to verify,
the accuracy of the factual matters represented, warranted or certified in the documents referred to
in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants
ZMFU II, Inc.
City of Sanger, Texas
January 17, 2023
Page 2 of 2
4159-5440-3139.2
and agreements contained in the Ordinance, including (without limitation) covenants and
agreements compliance with which is necessary to assure that future actions, omissions or events
will not cause interest on the Note to be included in gross income for federal income tax purposes.
We call attention to the fact that the rights and obligations under the Note, the Ordinance and their
enforceability may be subject to bankruptcy, insolvency, receivership, reorganization,
arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’
rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate
cases, and to the limitations on legal remedies against cities in the State of Texas. We express no
opinion with respect to any indemnification, contribution, liquidated damages, penalty (including
any remedy deemed to constitute a penalty), right of set-off, arbitration, choice of law, choice of
forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained
in the foregoing documents. Our services did not include financial or other non-legal advice.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are
of the following opinions:
1.The Note constitutes the valid and binding obligation of the City.
2.The City Council has power and is obligated to levy an annual ad valorem
tax, within the limits prescribed by law, upon taxable property located within the City,
which taxes have been pledged irrevocably to pay the principal of and interest on the Note.
3.Interest on the Note is excluded from gross income for federal income tax
purposes under Section 103 of the Internal Revenue Code of 1986. Interest on the Note is
not a specific preference item for purposes of the federal individual alternative minimum
tax. We observe that, for tax years beginning after December 31, 2022, interest on the
Note included in adjusted financial statement income of certain corporations is not
excluded from the federal corporate alternative minimum tax. We express no opinion
regarding other tax consequences related to the ownership or disposition of, or the amount,
accrual or receipt of interest on, the Note.
Faithfully yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
ZIONS BANCORPORATION, N.A.
ENTERPRISE SERVICES DIVISION - CORPORATE LEGAL SERVICES
One South Main | Suite 1100 | Salt Lake City UT 84133-
1109
rena.miller@zionsbancorp.com
June 15, 2022
Via email: PFDSupport@oag.texas.gov
Office of the Attorney General of Texas
Public Finance Division
300 West 15th Street, 7th Floor
Austin, Texas 78701
Office of the Attorney General of Texas:
To the extent any of its contracts with a governmental entity is a contract for goods or services submitted with the
record of public security proceedings, the undersigned company, for purposes of sections 2252.152, 2271.002, and
2274.002, Texas Government Code, as amended, hereby verifies that the company and any parent company, wholly
owned subsidiary, majority-owned subsidiary, and affiliate, including without limitation ZMFU II, Inc., a Utah
corporation and wholly-owned subsidiary of Zions Bancorporation, N.A.:
1) Do not boycott energy companies and are authorized to agree in such contracts not to boycott energy companies
during the term of such contracts. “Boycott energy company” has the meaning provided in section 809.001 of
the Texas Government Code.
2) Do not have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade
association and are authorized to agree in such contracts not to discriminate against a firearm entity or firearm
trade association during the term of such contracts. “Discriminate against a firearm entity or firearm trade
association” has the meaning provided in section 2274.001(3) of the Texas Government Code. “Firearm entity”
and “firearm trade association” have the meanings provided in section 2274.001(6) and (7) of the Texas
Government Code.
3) Do not boycott Israel and are authorized to agree in such contracts not to boycott Israel during the term of such
contracts. “Boycott Israel” has the meaning provided in section 808.001 of the Texas Government C ode.
4) Unless affirmatively declared by the United States government to be excluded from its federal sanctions regime
relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization, are not
identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under section
2252.153 or section 2270.0201 of the Texas Government Code.
“Affiliate” means any entity that controls, is controlled by, or is under common control with the company within the
meaning of SEC Rule 405, 17. C.F.R. § 230.405 and exists to make a profit.
The foregoing verifications are made solely to enable the governmental entity who is a party to such contracts to
Office of the Attorney General of Texas
Public Finance Division
June 15, 2022
comply with sections 2252.152, 2271.002, and 2274.002, Texas Government Code, as amended, and to the extent
such sections do not contravene applicable federal or Texas law.
The Office of the Attorney General of Texas may rely on this letter in its review and approval of public securities
under Texas law. Should a change occur that renders this letter ineffective, the company shall notify the Public
Finance Division immediately by email to PFDSupport@oag.texas.gov with the phrase “Ineffective Standing Letter”
in the subject heading.
ZIONS BANCORPORATION, N.A.
By: ________________________________________
Rena A. Miller
Deputy General Counsel
559 Silicon Drive, Suite 102
Southlake, TX 76092
Ted Christensen
(817) 722-0239
tchristensen@govcapsecurities.com
MEMORANDUM
To: Working Group Members – City of Sanger
From: Ted Christensen, Government Capital Securities Corporation
Re: Limited Tax Note, Series 2023
Date: January 17, 2023 (Funding Date)
The closing of the above referenced transaction is scheduled for January 17, 2023. We anticipate that the closing
will occur prior to 10:00am (CST).
1. Closing of the City of Sanger, Limited Tax Note, Series 2023 (the “Note”) will occur on Tuesday, January 17,
2023 when cleared by Orrick (“Bond Counsel”).
3. Prior to 9:00 a.m. CST on Tuesday, January 17, 2023, Zions Bancorporation, N.A. (the “Purchaser”) will wire
funds in payment for the Note, the sum of $5,065,000.00, as follows:
A. Wire transfer to the City of Sanger the amount of $5,000,000.00 representing the par amount of the
Note less costs of issuance. Wire instructions for the City of Sanger are as follows:
Bank Name: First United Bank
1403 W Chapman Dr, Sanger, TX 76266
Greg Hills, (940) 302-6042
ABA #:
B. Wire transfer to Government Capital Securities Corporation (the “Municipal Advisor”) the amount of
$65,000.00 representing the Costs of Issuance. Wire instructions for Government Capital Securities
Corporation are as follows:
Bank Name: Wells Fargo Bank Texas, NA
Routing #:
Acct Name: Governmental Capital Securities Corporation
Total $5,065,000.00
Best Regards,
Ted Christensen
Final