HomeMy WebLinkAbout06-22-07-Ordinance-Combination Tax and Revenu Certificates of Obligation Series 2007 1.75M-06/18/2007CITY OF SANGER, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION
SERIES 2007
INDEX OF CONTENTS
CERTIFICATE PROCEEDINGS AND DOCUMENTS
Closing Memorandum 1
Resolution Authorizing Publication of Notice 2
of Intention to Issue Certificates
Affidavit of Publication of Notice of Intent 3
Ordinance Authorizing Issuance of the Certificates 4
Purchase Letter 5
Paying Agent/Registrar Agreement 6
CERTIFICATES
General Certificate '7
Signature Identification and No -Litigation Certificate 8
Federal Tax Certificate and Form 8038G 9
OPINIONS
Approving Opinion of Bond Counsel 10
Opinion of Attorney General of Texas with
Certificate of Comptroller of Public Accounts 11
MISCELLANEOUS
Purchaser's Receipt 12
Initial Certificate 13
Bond Review Board Questionnaire 14
HOU:2702176.1
City of Sanger, Certificates of Obligation, Series 2007
_ Re: Closing Instructions with respect to the City of Sanger, Certificates of Obligation, Series
2007 (the "Securities").
Payment for the above referenced Securities is to occur on 7/3/2007 (the "Closing Date") and
funds for the payment of the Securities are to be cleared by the Bank of America (the "Paying
Agent"), as paying agent for the Securities, as follows:
(A) On the Closing Date, the Paying Agent will receive for the account of the City of Sanger,
Texas (the "Issuer ") from the Bank of America (the "Purchaser") in immediately available funds
in payment for the Securities, the sum of $1,750,000.00,
(B) On the Closing Date, the Paying Agent is instructed to disburse and expend funds
described in (A) above as follows:
(1) Wire transfer to the City of Sanger the amount of $1,720,000.00 representing the
principal amount of the Certificates less issuance costs.
Instructions for wiring funds to the City of Sanger are as follows:
First United Bank
Routing # 111911321
Account # 2375788
(4) Wire transfer to Government Capital Securities the amount of $30,000.00
representing its placement fee and expenses (including $7,750.00 for Andrews Kurth, $2,500.00
for Winstead, and $575.00 for Bank of America MAC Fees) with respect to the Securities.
Instructions for wiring funds to Government Capital Securities Corporation are as follows:
Wells Fargo Bank Texas, NA
505 Main Street, Suite 400
ABA#121000248
Account # 6859041375
Your cooperation is appreciated. If you have any questions please call me at (817) 421-5400.
Yours very truly,
Ted Christensen
Government Capital Securities Corporation
CERTIFICATE
STATE OF TEXAS §
COUNTY OF DENTON §
CITY OF SANGER §
THE UNDERSIGNED HEREBY CERTIFIES that:
1. On the 21 st day of May, 2007, a regular meeting of the City Council (the "City
Council") of the City of Sanger, Texas (the "City"), was held at the regular meeting place in the
City Hall of the City, the duly constituted members of the City Council being as follows:
Joe Higgs
Mike James
Glenn Ervin
Mike Walker
Andy Garza
Robert Patton
Mayor
Councilman, Place 1
Councilman, Place 2
Councilman, Place 3
Councilman, Place 4
Councilman, Place 5
and all of said persons were present at said meeting. Among other business considered at said
meeting, the attached Resolution entitled:
"A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SANGER,
TEXAS AUTHORIZING AND APPROVING PUBLICATION OF NOTICE OF
INTENTION TO ISSUE CERTIFICATES OF OBLIGATION; AND PROVIDING
AN EFFECTIVE DATE "
was introduced and submitted to the City Council for passage. After presentation and -due
consideration of the Resolution and, upon a motion duly made and seconded, the Resolution was
il to be effective immediately by the following vote:
duly passed and adopted by the City Counc
5 Voted "For" 0 Voted "Against" 0 Abstained
all as shown in the official Minutes of the City Council for the meeting held on the aforesaid
date.
2. The attached Resolution is a true and correct copy of the original on file in the
official records of the City; the duly qualified and acting members of the City Council of said
City on the date of the aforesaid meeting are those persons shown above and, according to the
records of my office, advance notice of the time, place and purpose of the meeting was given to
each member of the City Council; and that said meeting, and the deliberation of the aforesaid
public business, was open to the public and written notice of said meeting, including the subject
of the above entitled Resolution, was posted and given in advance thereof in compliance with the
provisions of V.T.C.A., Government Code, Chapter 551, as amended.
HOU:2693650.1
IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the
seal of the City, this the 21 st day of May, 2007.
City Secretary
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Signature Page to Certificate of Resolution
HOU:26936501 I
RESOLUTION
A RESOLUTION BY THE CITY COUNCIL OF THE CITY
OF SANGER, TEXAS AUTHORIZING AND APPROVING
PUBLICATION OF NOTICE OF INTENTION TO ISSUE
CERTIFICATES OF OBLIGATION; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City Council (the "City Council") of the City of Sanger, Texas (the
"City") has determined that it is advisable and necessary to issue and sell one or more series of
certificates of obligations (the "Certificates") in an amount not to exceed $1,750,000 as provided
pursuant to the provisions of the Certificate of Obligation Act of 1971, as amended, Local
Government Code, Section 271.041 through 271.063, for the purposes of paying contractual
obligations of the City to be incurred for making permanent public improvements and for other
public purposes, to -wit, (1) to acquire and renovate a building and parking area to be used by the
City's public works department; (2) to purchase phone, alarm and computer equipment and
office furniture for such building (the "Project"); and (3) the payment for professional services
related thereto; and
WHEREAS, prior to the issuance of the Certificates, the City Council is required to
publish notice of its intention to issue the Certificates in a newspaper of general circulation in the
City, such notice stating (i) the time and place the City Council tentatively proposes to pass the
Resolution authorizing the issuance of the Certificates, (ii) the maximum amount proposed to be
issued, (iii) the purposes for which the Certificates are to be issued, and (iv) the manner in which
the City Council proposes to pay the Certificates; and
WHEREAS, the City Council has entered into or will enter into various contracts
pertaining to the expenditure of lawfully available funds of the City to finance the costs of the
Project; and
WHEREAS, the City Council desires to hire Government Capital Securities Corporation
as the City's financial advisor; and .
WHEREAS, the City Council hereby finds and determines that the adoption of this
Resolution is in the best interests of the citizens of the City; now, therefore,
BE IT RESOLVED BY THE OF THE CITY OF BANGER, TEXAS THAT:
SECTION 1. The City Secretary is hereby authorized and directed to cause notice to be
published of the City Council's intention to issue the Certificates in an amount not to exceed
$1,750,000 for the purpose of paying contractual obligations of the City to be incurred for
making permanent public improvements and for other public purposes, to -wit, (1} to acquire and
renovate a building and parking area to be used by the City's public works department; (2) to
purchase phone, alarm and computer equipment and office furniture for such building; and (3)
the payment for professional services related thereto. The Certificates will be payable from the
levy of any annual ad valorem tax, within the limitations prescribed by law, upon all taxable
property within the City and additionally from a pledge of and lien on surplus net revenues
derived from the operation of the City's water and sewer system not to exceed $1,000. The
notice hereby approved and authorized to be published shall read substantially in the form and
HOU:2693650.1
content of attached hereto, which notice is incorporated herein by reference as a part of this
Resolution for all purposes.
SECTION I The City Secretary shall cause the notice described in Section 1 to be
published in a newspaper of general circulation in the City, once a week for two consecutive
weeks, the date of the first publication shall be at least fifteen (15) days prior to the date stated
therein for passage of the Ordinance authorizing the issuance of the Certificates.
SECTION 3. The City Secretary is directed to maintain a copy of this Resolution in the
City's official records in a manner that will allow any member of the general public to review
this Resolution during the normal business hours of the City during the period beginning thirty
(30) days after the adoption hereof and ending on the date of issuance of the Certificates.
SECTION 4. This Resolution may be relied upon by the appropriate officials at the
Office of the Attorney General for the State of Texas, and established compliance by the City
with the requirements of Texas law.
SECTION 5. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a
part of the judgment and findings of the City Council.
SECTION 6. All Resolutions and resolutions, or parts thereof, which are in conflict or
inconsistent with any provision of this Resolution are hereby repealed to the extent of such
conflict, and the provisions of this Resolution shall be and remain controlling as to the matters
resolved herein.
SECTION 7. This Resolution shall be construed and enforced in accordance with the
laws of the State of Texas.
SECTION 8. If any provision of this Resolution or the application thereof to any person
or circumstances shall be held to be invalid, the remainder of this Resolution and the application
of such provision to other persons and circumstances shall nevertheless be valid, and the City
Council hereby declares that this Resolution would have been enacted without such invalid
provision.
SECTION 9. It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Resolution, was
given, all as required by Chapter 551, as amended, Texas Government Code.
SECTION 10. This Resolution shall be in force and effect from and after the date of its
adoption, and it is so resolved.
The remainder of this page intentionally left blank.]
HOU:2693650.1
PASSED AND ADOPTED, this the 21st day of May, 2007.
ATTEST:
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Signature Page to Resolution Authorizing Publication of Notice of Intention
to Issue Certificates of Obligation
HOU:2693650.1
NOTICE OF INTENTION TO ISSUE
CITY OF SANGER, TEXAS
CERTIFICATES OF OBLIGATION
NOTICE IS HEREBY GIVEN that the City Council of the City of Sanger, Texas will
convene a special meeting at its regular meeting place in the City Hall in Sanger, Texas, at 7#00
p.m., on the 18th day of June, 2007, and, during such meeting, the City Council will consider the
passage of an Ordinance or Ordinances and take such other actions as may be deemed necessary
to authorize the issuance of one or more series of certificates of obligation in aggregate principal
amount not to exceed $1,750,000 (the "Certificates") for the purposes or purposes of paying
contractual obligations of the City to be incurred for making permanent public improvements
and for other public purposes, to -wit: (1) to acquire and renovate a building and parking area to
be used by the City's public works department, (2) to purchase phone, alarm and computer
equipment and office furniture for such building; and (3) the payment for professional services
related thereto. The Certificates will be payable from the levy of an annual ad valorem tax,
within the limitations prescribed by law, upon all taxable property within the City and from a
lien on and pledge of surplus net revenues derived by the City from the operation of the City's
water and sewer system not to exceed $1,000, The Certificates are to be issued, and this notice is
given under and pursuant to the provisions of the Certificate of Obligation Act of 1971, as
amended, Local Government Code Section 271.041 through Section 271.063 and Chapter 1502,
Government Code, as amended.
City Secretary
City of Sanger, Texas
HOU:2693650.1
06/29/2007 09035 9404584180
lV 'A KM IV.LATTER OF
CITY OF SANGER
City of Sanger, Texas
_Notice of Intent to Issue City of Sanger, Texas Certificates of Obligation
THE STATE OF TEXAS
The County of Denton
PAGE
Lee Ann Lemons
being duly sworn says she is Advertising Manager of the Sanger Courier, a newspaper of
general circulation which has been continuously and regularly published for a period of
not less than one year in the County of Denton, 'Texas, preceding the date and of the
attached notice, and that the said notice was published in said paper on the following
dates:
TI-IIJRSDAY, M,AY 24, 2007
�RID.A.Y, JUNE 17 2007
Paid advertisez�citent under "Legal Notices" section
Subscribed and sworn before me this
Witness xzay land and official seal
day of
aao7
Notary Public, Denton County, Texas
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CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTIES OF SMITH AND CHEROKEE §
CITY OF SANGER I §
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 on June 18, 2007, at
the regular meeting place thereof, within the City, and the roll was called of the duly constituted
officers and members of the City Council, to wit:
Joe Higgs
Thomas Muir
Glenn Ervin
Mike Walker
Andy Garza
Robert Patton
Mayor
Councilman, Place 1
Councilman, Place 2
Councilman, Place 3
Councilman, Place 4
Councilman, Place 5
and all of such persons were present, thus constituting a quorum. Whereupon, among other
business, the following was transacted at said meeting: a written
AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF SANGER,
TEXAS CERTIFICATES OF OBLIGATION, SERIES 2007; PRESCRIBING
THE TERMS AND FORM THEREOF; PROVIDING FOR THE PAYMENT OF
THE PRINCIPAL THEREOF AND INTEREST THEREON, AWARDING THE
SALE THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH
CERTIFICATES, INCLUDING USE OF THE PROCEEDS THEREOF, AND
MATTERS INCIDENT THERETO,
(the "Ordinance") was duly introduced for the consideration of the City Council and read in full.
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:
AYES: 5 NAYS: 0 ABSTENTIONS: 0
2. That a true, full and correct copy of the Ordinance adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this certificate; that the
Ordinance has been duly recorded in the City Council's minutes of such meeting; that the above
and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of
such meeting pertaining to the adoption of the Ordinance; that the persons named in the above
and foregoing paragraph are the duly chosen, qualified and acting officers and members of the
S-1
HOU:2700271.2
City Council as indicated therein; that each of the officers and members of the City Council was
duly and sufficiently notified officially and personally, in advance, of the date, hour, place and
subject of the aforesaid meeting, and that the Ordinance would be introduced and considered for
adoption at such meeting, and each of such officers and members consented, in advance, to the
holding of such meeting for such purpose; that such meeting was open to the public as required
by law; and that public notice of the date, hour, place and subject of such meeting was given as
required by the Open Meetings Law, Chapter 551, Texas Government Code.
SIGNED AND SEALED this June 18, 2007.
City Seca
CITY OF
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CITY OF SANGER, TEXAS
HOU:2700271.2
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AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF
BANGER, TEXAS COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2007; PRESCRIBING THE
TERMS AND FORM THEREOF; PROVIDING FOR THE PAYMENT OF
THE PRINCIPAL THEREOF AND INTEREST THEREON; AWARDING
THE SALE THEREOF; MAKIl�TG OTHER PROVISIONS REGARDING
SUCH CERTIFICATES, INCLUDING USE OF THE PROCEEDS
THEREOF, AND MATTERS INCIDENT THERETO;
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SANGER:
ARTICLE I
FINDINGS AND DETERMINATIONS
Section l.l: Findings and Determinations. The City Council hereby officially finds
and determines that:
(a) The City of Sanger, Texas (the "City"), acting through its City Council, is authorized
pursuant to and in accordance with the provisions of Texas Local Government Code, Chapter
271, Subchapter C, as amended (the "Act"), to issue certificates of obligation to provide all or
part of the funds to pay contractual obligations to be incurred for the construction of public
works and the purchase of materials, supplies, equipment, machinery, buildings, land and rights -
of -way for authorized needs and purposes and for the payment of contractual obligations for
professional services, to wit (1) to acquire and renovate a building and parking area to be used
by the City's public works department; (2) to purchase phone, alarm and computer equipment
and office furniture for such building, and (3) professional services rendered in connection with
the above listed projects.
(b) The City Council authorized the publication of a notice of intention to issue
Certificates of Obligation, Series 2007 (the "Certificates") to the effect that the City Council was
tentatively scheduled to meet at 7:00 p.m. on June 18, 2007 at its regular meeting place to adopt
an ordinance authorizing the issuance of the Certificates to be payable from (i) an ad valorem tax
levied, within the limits prescribed by law, on the taxable property located within the City, and
(ii) the revenues to be derived from the City's water and sewer system (the "System") after the
payment of all operation and maintenance expenses thereof (the "Net Revenues") in an amount
not to exceed $1,000, to the extent that ad valorem taxes are ever insufficient or unavailable for
such purposes, provided that the pledge of Net Revenues is and shall be junior and subordinate in
all respects to the pledge of Net Revenues to the payment of any obligation of the City, whether
authorized heretofore or hereafter, which the City designates as having a pledge senior to the
pledge of the Net Revenues to the payment of the Certificates.
(c) Such notice was published at the times and in the manner required by the Act.
HOU:2700271.2
(d) No petition signed by at least five percent (5%) of the qualified voters of the City has
— been filed with or presented to any official of the City protesting the issuance of such Certificates
on or before June 18, 2007, or the date of passage of this Ordinance.
(e) The City has determined thCo best interests of the City and that it is
otherwise desirable to issue the Certificates to provide all or part of the funds to pay contractual
obligations to be incurred for the purposes authorized by the Act.
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 Local Government Code, Chapter 271, Subchapter C, as
amended.
"Attorney General" shall mean the Attorney General of the State of Texas.
"Certificate" or "Certificates" shall mean any or all of the City of Sanger, Texas
Certificates of Obligation, Series 2007, authorized by this Ordinance.
"City" shall mean the City of Sanger, Texas and, where appropriate, its City Council.
"City Council" shall mean the governing body of the City.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas.
"DTC" shall mean The Depository Trust Company, New York, New York, or any
successor securities depositor}k.
"DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
- to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Fiscal Year" shall mean the City's then designated fiscal year, which currently is the
twelve-month period beginning on the first day of October of a calendar year and ending on the
last day of September of the next succeeding calendar year and each such period may be
designated with the number of the calendar year in which such period ends.
"Interest Payment Date," when used in connection with any Certificate, shall mean
August 1, 2008, and each February 1 and August 1 thereafter until maturity or earlier redemption
of such Certificate.
HOU:2700271.2
"Issuance Date" shall mean the date on which the Certificates are delivered to and paid
for by the Purchaser.
"Ordinance" shall mean this Ordinance and all amendments hereof and supplements
hereto.
"Outstanding", when used with reference to the Certificates, shall mean, as of a particular
date, all Certificates theretofore and thereupon delivered pursuant to this Ordinance except, (a)
any Certificates canceled by or on behalf of the City at or before such date; (b) any Certificates
defeased pursuant to the defeasance provisions of this Ordinance or otherwise defeased as
permitted by applicable law; and (c) any Certificates in lieu of or in substitution for which a
replacement Certificate shall have been delivered pursuant to this Ordinance.
"Paying Agent/Registrar" shall mean Bank of America, N.A., Dallas, Texas, and its
successors in that capacity.
"Purchaser" shall mean the entity or entities specified in Section 7.1 hereof.
"Record Date" shall mean the close of business on the fifteenth day of the calendar
month immediately preceding the applicable Interest Payment Date.
"Register" shall mean the registration books for the Certificates 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 Certificates.
"Registered Owrier" shall mean the person or entity in whose name any Certificate 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 all genders. 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
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 Certificates and the validity of the levy of ad valorem taxes to pay the principal of
and interest on the Certificates.
ARTICLE III
TERMS OF THE CERTIFICATES
Section 3.1: Amount, Purpose and Authorization. (a) The Certificates 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 ONE MILLION SEVEN HUNDRED FIFTY
THOUSAND AND N0/100 DOLLARS ($1,750,000) for the purpose of providing all or part of
the funds to pay contractual obligations to be incurred for the purposes described in paragraph
1.1(a) hereof.
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HOU:2700271.2
Section 3.2: Designation, Date and Interest Payment Dates. The Certificates shall be
_ designated as the "City of Sanger, Texas Combination Tax and Revenue Certificates of
Obligation, Series 2007," and shall be dated June 15, 2007. The Certificates shall bear interest at
the rates set forth in Section 3.3 below, from their date of delivery calculated on the basis of a
360-day year of twelve 30-day months, payable on August 1, 2008, and each February 1 and
August 1 thereafter until maturity or earlier redemption.
If interest on any Certificate 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 (S) 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 Maturity. The Certificates
shall be issued, sold, and delivered hereunder one fully registered Certificate, without interest
coupons, in the denomination and principal amount of $1,750,000 numbered R-1, with any
Certificate issued in replacement thereof being in the denomination of the full principal amount
of the series of which the Certificate is issued, and numbered consecutively from R-2 upward,
payable in installments to the registered owner thereof, or to the registered assignee of said
Certificate. Principal of said Certificates shall mature and be payable in installments on the dates
and in the amounts stated in the FORM OF CERTIFICATES set forth in this Ordinance. The
Certificates shall bear interest on the unpaid balance of the principal amount thereof from the
date of delivery to the scheduled due date, or date of prepayment or redemption prior to the
scheduled due date, of the principal installments of the Certificates at the rate of interest stated in
the FORM OF CERTIFICATES set forth in this Ordinance. Said interest shall be payable in the
manner provided and on the dates stated in the FORM OF CERTIFICATES set forth in this
Ordinance.
Section 3.4: Redemption Prior to Maturity. (a) On any date, the principal installments
of the Certificates maybe redeemed prior to their scheduled maturities, at the option of the City,
with funds derived from any available and lawful source, as a whole, or in part, and, if in part,
the particular principal installments or portions thereof, to be redeemed shall be selected and
designated by the City, at a redemption price equal to the principal amount to be redeemed plus
accrued interest to the date fixed for redemption, plus the "Make -Whole Amount". The Make -
Whole Amount shall be equal to the greater of (i) zero, or (ii) the Mark -to -Market adjustment.
The City shall determine the principal amount and the principal installments of the Certificate to
be redeemed and shall provide the Registered Owner with at least three Business Days written
notice in advance of the date of redemption.
For the purposes of the above, the following definitions shall apply:
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HOU:2700271.2
1. Mark -to -Market Adjustment: The amount, calculated on any prepayment date, which
is derived by subtracting: (i) the principal amount of the Certificate to be prepaid as of
such prepayment date, from (ii) the Mark -to -Market Value of the Certificate to be prepaid
on such prepayment date.
2. Mazk-to-Mazket Value: The amount, calculated on any prepayment date, which is
derived by summing the present values of each prospective payment of principal and
interest which without such full or partial prepayment, could otherwise have been
received by the Purchaser over the remaining contractual life of the Certificate if the
Purchaser had instead invested the proceeds of the Certificate on the issuance date at the
Initial Blended Money Market Funds Rate. The individual discount rate used to evaluate
each prospective payment of interest and/or principal shall be the Current Blended
Money Market Funds Rate for the maturity matching that of each specific payment of
principal and/or interest.
3. Initial Blended Money Market Funds Rate: That borrowing rate, calculated on the
issuance date and including costs incurred by the Purchaser or FDIC insurance, reserve
requirements, and other such explicit or implicit cost levied upon the Purchaser by any
regulatory agency, which would be attainable by the Purchaser if it borrowed funds with
an interest payment frequency and principal repayment schedule matching that of the
Certificate. Such funds would be borrowed in one or more wholesale funding markets
available to the Purchaser, including negotiable certificates of deposits, federal funds and
others. The City acknowledges that the Purchaser may not actually purchase the
Certificate with any such specific matched set or mix of instruments, and that the Initial
Blended Money Market Funds Rate is the Purchaser's reasonable estimate only.
4. Current Blended Money Market Funds Rate: That rate, calculated on the prepayment
date and including cost incurred by the Purchaser for FDIC insurance, reserve
requirements, and other such explicit or implicit cost levied upon the Purchaser by any
regulatory agency, which would be attainable by the Purchaser if it borrowed funds in a
maturity matching a specific prospective Certificate payment date. Such funds would be
borrowed in one or more wholesale funding markets available to the Purchaser, including
negotiable certificates of deposit, federal funds, or others. A separate Current Blended
Money Market Funds Rate will be calculated for each prospective interest and/or
principal payment date. City acknowledges that the Current Blended Money Market
Funds Rate is the Purchaser's reasonable estimate only, and that the Purchaser is under no
obligation actually to purchase or match funds for any transaction.
(b) Certificates may be redeemed in part only in integral multiples of $5,000. If a
Certificate subject to redemption is in a denomination larger than $5,000, a portion of such
Certificate may be redeemed, but only in integral multiples of $5,000. In selecting portions of
Certificates for redemption, each Certificate shall be treated as representing that number of
Certificates of $5,000 denomination which is obtained by dividing the principal amount of such
Certificate by $5,000. Upon presentation and surrender of any Certificate for redemption in part,
the Paying Agent/Registrar, in accordance with the provisions of this Ordinance, shall
authenticate and deliver in exchange therefor a Certificate or Certificates of like maturity and
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HOU:2700271.2
interest rate in an aggregate principal amount equal to the unredeemed portion of the Certificate
so surrendered.
(c) Notice of any redemption, identifying the Certificates or portions thereof to be
redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered
Owners thereof at their addresses as shown on the Register, not less than thirty (30) days before
the date fixed for such redemption. By the date fixed for redemption, due provision shall be
made with the Paying Agent/Registrar for the payment of the redemption price of the Certificates
called for redemption. If such notice of redemption is given, and if due provision for such
payment is made, all as provided above, the Certificates which are to be so redeemed thereby
automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest
after the date fixed for redemption, and they shall not be regarded as being Outstanding except
for the purpose of being paid with the funds so provided for such payment.
Section 3.5: Manner of Payment, Characteristics Execution and Authentication. The
Paying Agent/Registrar is hereby appointed the paying agent for the Certificates. The
Certificates shall be payable, shall have the characteristics and shall be executed, sealed,
registered and authenticated, all as provided and in the manner indicated in the FORM OF
CERTIFICATES set forth in Article IV of this Ordinance. If any officer of the City whose
manual or facsimile signature shall appear on the Certificates shall cease to be such officer
before the authentication of the Certificates or before the delivery of the Certificates, 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 Andrews Kurth LLP, Houston, Texas, Bond Counsel,
maybe printed on the back of the Certificates over the certification of the City Secretary, which
may be executed in facsimile. CUSIP numbers also may be printed on the Certificates, but errors
or omissions in the printing of either the opinion or the numbers shall have no effect on the
validity of the Certificates.
Section 3.6: Authentication. Except for the Certificates to be initially issued, which
need not be authenticated by the Registrar, only such Certificates as 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 Certificate 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 Certificate is registered as the absolute owner of such
Certificate for the purpose of making and receiving payment of the principal thereof and interest
thereon and for all other purposes, whether or not such Certificate is overdue, and neither the
City nor the Paying AgentlRegistrar 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 Certificate 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 Certificate to the extent of the sums paid.
HOU:2700271.2
Section 3.8: Registration, Transfer and Exchange. The Paying Agent/Registrar is
hereby appointed the registrar for the Certificates. So long as any Certificate remains
Outstanding, the Paying Agent/Registrar shall keep the Register at the City Administrator's
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 Certificates in accordance
with the terms of this Ordinance.
Each Certificate shall be transferable only upon the presentation and surrender thereof at
the principal 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 Certificate for transfer, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two (72)
hours after such presentation, a new Certificate or Certificates, 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 Certificate or Certificates so
presented and surrendered.
All Certificates shall be exchangeable upon the presentation and surrender thereof at the
principal corporate trust office of the Paying Agent/Registrar for a Certificate or Certificates,
maturity and interest rate and in any authorized denomination, in an aggregate principal amount
equal to the unpaid principal amount of the Certificate or Certificates presented for exchange.
The Paying Agent/Registrar shall be and is hereby authorized to authenticate and deliver
exchange Certificates in accordance with the provisions of this Section. Each Certificate
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 Certificate or Certificates in lieu
of which such Certificate is delivered.
All Certificates issued in transfer or exchange shall be delivered to the Registered
Owners thereof at the principal 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
Certificate 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 Certificate. Any fee or charge of
the Paying Agent/Registrar for such transfer or exchange shall be paid by the City.
The Paying Agent/Registrar shall not be required to transfer or exchange any Certificate
called for redemption in whole or in part during the forty-five (45) day period immediately prior
to the date fixed for redemption; provided, however, that this restriction shall not apply to the
transfer or exchange by the Registered Owner of the unredeemed portion of a Certificate called
for redemption in part.
Section 3.9: Book -Entry Only System. The definitive Certificates shall be initially
issued in the form. of a separate single fully registered Certificate for each of the maturities
thereof. Upon initial issuance, the ownership of each such Certificate may be registered in the
name of Cede & Co., as nominee of DTC, and except as provided in Section 3.11 hereof, all of
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the Outstanding Certificates shall be registered in the name of Cede & Co., as nominee of DTC.
— Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in
this Ordinance with respect to interest checks being mailed to the Owner at the close of business
on the Record Date, the word "Cede & Co." in this Ordinance shall refer to such new nominee of
DTC.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC,
the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest in the
Certificates. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (a) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Certificates, (b) the delivery to any DTC Participant or any other person, other than a
Certificateholder, as shown on the Register, of any notice with respect to the Certificates,
including any notice of redemption or (c) the payment to any DTC Participant or any other
person, other than a Certificateholder as shown in the Register, of any amount with respect to
principal of Certificates, premium, if any, or interest on the Certificates.
. Except as provided in Section 3.10 of this Ordinance, the City and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate
is registered in the Register as the absolute owner of such Certificate for the purpose of payment
of principal of, premium, if any, and interest on Certificates, for the purpose of giving notices of
redemption and other matters with respect to such Certificate, for the purpose of registering
transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of Certificates, premium, if any, and interest on the
Certificates only to or upon the order of the respective owners, as shown in the Register as
provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the City's obligations with
respect to payment of principal of, premium, if any, and interest on the Certificates to the extent
of the sum or sums so paid. No person other than an owner shall receive a Certificate evidencing
the obligation of the City to make payments of amounts due pursuant to this Ordinance. '
Section 3.10: Payments and Notices to Cede & Co Notwithstanding any other
provision of this Ordinance to the contrary, as long as any Certificates are registered in the name
of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any,
and interest on the Certificates, and all notices with respect to such Certificates shall be made
provided in the representation letter of the City to DTC.
and given, respectively, in the manner
Section 3.11: Successor Securities Depository Transfer Outside Book -Entry Only
System. In the event that the City or the Paying Agent/Registrar determines that DTC is
incapable of discharging its responsibilities described herein and in the representation letter of
the City to DTC, and that it is in the best interest of the beneficial owners of the Certificates that
they be able to obtain certificated Certificates, the City or the Paying Agent/Registrar shall (a)
appoint a successor securities depository, qualified to act as such under Section 17(a) of the
Securities and Exchange Act of 1934, as amended, notify DTC of the appointment of such
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HOU:2700271.2
successor securities depository and transfer one or more separate Certificates to such successor
securities depository or (b) notify DTC of the availability through DTC of Certificates and
transfer one or more separate Certificates to DTC Participants having Certificates credited to
their DTC accounts. In such event, the Certificates shall no longer be restricted to being
registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered
in the name of the successor securities depository, or its nominee, or in whatever name or names
Certificateholders transferring or exchanging Certificates shall designate, in accordance with the
provisions of this Ordinance.
Section 3.12: Replacement Certificates. Upon the presentation and surrender to the
Paying Agent/Registrar of a damaged or mutilated Certificate, the Paying Agent/Registrar shall
authenticate and deliver in exchange therefor a replacement Certificate, 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 Certificate 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 Certificate 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 Certificate has been acquired by a bona fide purchaser, shall execute, and
the Paying Agent/Registrar shall authenticate and deliver, a replacement Certificate 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 Certificate,
(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 Certificate, a bona fide purchaser of the original
Certificate in lieu of which such replacement Certificate was issued presents for payment such
original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such
replacement Certificate from the 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.
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If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has
become or is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Certificate, authorize the Paying Agent/Registrar to pay such Certificate.
Each replacement Certificate delivered in accordance with this Section shall be entitled to
the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in
lieu of which such replacement Certificate is delivered.
Section 3.13: Cancellation. All Certificates paid or redeemed in accordance with this
Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates
are authenticated and delivered in accordance herewith, shall be canceled and destroyed upon the
making of proper records regarding such payment or redemption. The Paying Agent/Registrar
shall periodically furnish the City with certificates of destruction of such Certificates.
ARTICLE IV
FORM OF CERTIFICATES
The Certificates, including the Form of Comptroller's Registration Certificate, Form of
Paying Agent/Registrar Authentication Certificate, Statement of Insurance 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:
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UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SANGER, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION
SERIES 2007
NUMBER DENOMINATION
R-
$1,750,000
REGISTERED REGISTERED
INTEREST RATE: DATED DATE: DELIVERY DATE:
4.40% June 15, 2007 July 3, 2007
REGISTERED OWNER: BANK OF AMERICA, N.A.
PRINCIPAL AMOUNT: ONE MILLION SEVEN HUNDRED FIFTY THOUSAND AND
N0/100 DOLLARS ($1,750,000)
THE CITY OF SANGER, TEXAS, a municipal corporation of the State of Texas (the
"City"), for value received, hereby promises to pay to the Registered Owner identified above or
its registered assigns, upon presentation and surrender of this Certificate at the principal
corporate trust office of Bank of America, N.A., Dallas, Texas, or its successor (the "Paying
Agent/Registrar), the principal amount identified above (or so much thereof as shall not have
been paid or deemed to have been paid upon prior redemption) 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 to the United States of America, and to pay interest thereon at the
rate shown above, calculated on a basis of a 360-day year composed of twelve 30-day months,
from the Delivery Date identified above. Interest on this Certificate is payable on August 1,
2008, and each February 1 and August 1 thereafter until maturity or earlier redemption of this
Certificate, 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 fifteenth 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 or earlier redemption shall be paid upon presentation and surrender of this Certificate at
the principal corporate trust office of the Paying Agent/Registrar. The unpaid principal of this
Certificate shall mature and shall be payable in installments on August 1 in the years and in the
amounts set forth in the table below:
Payment Date Principal Amount Payment Date Principal Amount
2008 $ 50,000 2018 85,000
2009 60,000 2019 90,000
2010 60,000 2020 959000
2011 655000 2021 100,000
2012 65,000 2022 1055000
2013 70,000 2023 1109000
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2014 75,000 2024 110,000
2015 75,000 2025 115,000
2016 80,000 2026 125,000
2017 85,000 2027 130,000
THIS CERTIFICATE REPRESENTS A DULY AUTHORIZED SERIES OF
CERTIFICATES (the "Certificates") in the aggregate principal amount of $1,750,000 issued
pursuant to an ordinance adopted by the City Council of the City on June 18, 2007 (the
"Ordinance") for the purpose of providing all or part of the funds to pay contractual obligations
to be incurred for the construction of public works and the purchase of materials, supplies,
equipment, machinery, buildings, land and rights -of --way for authorized needs and purposes and
for the payment of contractual obligations for professional services, to wit (1) to acquire and
renovate a building and parking area to be used by the City's public works department; (2) to
purchase phone, alarm and computer equipment and office furniture for such building, and (3)
professional services rendered in connection with the above listed projects.
THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to
any benefit under the Ordinance unless this Certificate 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.
ON ANY DATE, the principal installments of this Certificate may be redeemed prior to
their scheduled maturities, at the option of the City, with funds derived from any available and
lawful source, as a whole, or in part, and, if in part, the particular principal installments or
portions thereof, to be redeemed shall be selected and designated by the City, at a redemption
price equal to the principal amount to be redeemed plus accrued interest to the date fixed for
redemption, plus the "Make -Whole Amount". The Make -Whole Amount shall be equal to the
greater of (i) zero, or (ii) the Mark -to -Market adjustment. The City shall determine the principal
amount and the principal installments of this Certificate to be redeemed and shall provide the
Registered Owner with at least three Business Days written notice in advance of the date of
redemption.
For the purposes of the above, the following definitions shall apply:
1. Mark -to -Market Adjustment: The amount, calculated on any prepayment date, which
is derived by subtracting: (i) the principal amount of this Certificate to be prepaid as of
such prepayment date, from (ii) the Mark -to -Market Value of this Certificate to be
prepaid on such prepayment date.
2. Mark -to -Market Value: The amount, calculated on any prepayment date, which is
derived by summing the present values of each prospective payment of principal and
interest which without such full or partial prepayment, could otherwise have been
received by the Purchaser over the remaining contractual life of this Certificate if the
Purchaser had instead invested the proceeds of this Certificate on the issuance date at the
Initial Blended Money Market Funds Rate. The individual discount rate used to evaluate
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each prospective payment of interest and/or principal shall be the Current Blended
Money Market Funds Rate for the maturity matching that of each specific payment of
principal and/or interest.
3. Initial Blended Money Market Funds Rate: That borrowing rate, calculated on the
issuance date and including costs incurred by the Purchaser or FDIC insurance, reserve
requirements, and other such explicit or implicit cost levied upon the Purchaser by any
regulatory agency, which would be attainable by the Purchaser if it borrowed funds with
an interest payment frequency and principal repayment schedule matching that of this
Certificate. Such funds would be borrowed in one or more wholesale funding markets
available to the Purchaser, including negotiable certificates of deposits, federal funds and
others. The City acknowledges that the Purchaser may not actually purchase this
Certificate with any such specific matched set or mix of instruments, and that the Initial
Blended Money Market Funds Rate is the Purchaser's reasonable estimate only.
4. Current Blended Money Market Funds Rate: That rate, calculated on the prepayment
date and including cost incurred by the Purchaser for FDIC insurance, reserve
requirements, and other such explicit or implicit cost levied upon the Purchaser by any
regulatory agency, which would be attainable by the Purchaser if it borrowed funds in a
maturity matching a specific prospective Certificate payment date. Such funds would be
borrowed in one or more wholesale funding markets available to the Purchaser, including
negotiable certificates of deposit, federal funds, or others. A separate Current Blended
Money Market Funds Rate will be calculated for each prospective interest and/or
principal payment date. City acknowledges that the Current Blended Money Market
Funds Rate is the Purchaser's reasonable estimate only, and that the Purchaser is under no
obligation actually to purchase or match funds for any transaction.
CERTIFICATES MAY BE REDEEMED IN PART only in integral multiples of $5,000.
If a Certificate subject to redemption is in a denomination larger than $5,000, a portion of such
Certificate may be redeemed, but only in integral multiples of $5,000. In selecting portions of
Certificates for redemption, each Certificate shall be treated as representing that number of
Certificates` of $5,000 denomination which is obtained by dividing the principal amount of such
Certificate by $5,000, Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with the provisions of the Ordinance, shall authenticate and
deliver in exchange therefor a Certificate or Certificates of like maturity and interest rate in an
aggregate principal amount equal to the unredeemed portion of this Certificate so surrendered.
identifying the Certificates or portions
NOTICE OF ANY SUCH REDEMPTION,
thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the
Registered Owners thereof at their addresses as shown on the books of registration kept by the
Paying Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption.
By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar
For the payment of the redemption price of the Certificates called for redemption. If such notice
of redemption is given, and if due provision for such payment is made, all as provided above, the
Certificates which are to be so redeemed thereby automatically shall be redeemed prior to their
scheduled maturities, they shall not bear interest after the date fixed for redemption, and they
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shall not be regarded as being outstanding except for the purpose of being paid with the funds so
provided for such payment.
THIS CERTIFICATE IS TRANSFERABLE only upon presentation and surrender at the
principal 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 CERTIFICATE IS EXCHANGEABLE at the principal corporate trust office of the
Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and
in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and
conditions of the Ordinance.
THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange
any Certificate called for redemption, in whole or in part, during the forty-five (45) day period
immediately prior to the date fixed for redemption; provided, however, that such limitation shall
not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a
Certificate called for redemption in part.
THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of
any Certificate 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 Certificate. 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 Certificate 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 Certificate 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 Certificate
have been performed, exist and have been done in accordance with law; that the Certificates do
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 Certificate, 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.
IT IS FURTHER DECLARED AND REPRESENTED that the revenues to be derived
from the City's water and sewer system, after the payment of all operation and maintenance
expenses thereof (the "Net Revenues"), in an amount not to exceed $1,000, are pledged to the
payment of the principal of and interest on the Certificates, provided that the pledge of Net
Revenues is and shall be junior and subordinate in all respects to the pledge of Net Revenues to
the payment of any obligation of the City, whether authorized heretofore or hereafter, which the
City designates as having a pledge senior to the pledge of the Net Revenues to the payment of
the Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in
one or more installments, bonds, certificates of obligation and other obligations of any kind,
secured in whole or in part by a pledge of Net Revenues, that may be prior and superior in right
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to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing the
Certificates.
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 Certificates assent by acceptance of the Certificates.
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or
placed in facsimile hereon and this Certificate to be signed by the Mayor, countersigned by the
City Secretary by their manual, lithographed or printed facsimile signatures.
CITY OF BANGER, TEXAS
Mayor
(SEAL)
COUNTERSIGNED:
City Secretary
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HOU:2700271.2
FORM OF COMPTROLLERS REGISTRATION CERTIFICATE
The following form of Comptroller's Registration Certificate shall be attached or affixed
to each of the Certificates initially delivered:
THE STATE OF TEXAS
REGISTER NO.
OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS
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
of the State of Texas
[SEAL]
FORM OF PAYING AGENT/REGISTRAR'SAUTHENTICRTION CERTIFICATE
The following form of authentication certificate shall be printed on the face of each of the
Certificates other than those initially delivered:
AUTHENTICATION CERTIFICATE
By:
Authorized Signature
Date of Authentication:
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HOU:2700271.2
FORM OF ASSIGNMENT
The following form of assignment shall be printed on the back of each of the Certificates:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
(Please print or type name, address, and zip code %J Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer such bond 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 bond in
every particular, without any alteration,
enlargement or change whatsoever.
ARTICLE V
SECURITY FOR THE CERTIFICATES
Section S.l: Pledue and Levy of Taxes and Revenues. (a) To provide for the payment
of principal of and interest on the Certificates, there is hereby levied, within the limits prescribed
by law, for the current year and each succeeding year thereafter, while the Certificates 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
Certificates and to create and provide a sinking fund of not less than 2% of the principal amount
of the Certificates 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
Certificates by deposit to the Combination Tax and Revenue Certificates of Obligation, Series
2007 Debt Service Fund 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 Certificates, 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 Certificates remain outstanding, all moneys on deposit in,
or credited to, the Combination Tax and Revenue Certificates of Obligation, Series 2007 Debt
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Service Fund shall be secured by a pledge of security, as provided by law for cities in the State of
Texas.
(c) In addition, pursuant to the authority of Chapter 1502, Texas Government Code, as
amended, the City also hereby pledges the revenues to be derived from the City's water and
sewer system, after the payment of all operation and maintenance expenses thereof (the "Net
Revenues"), in an amount not to exceed $1,000, to the payment of the principal of and interest on
the Certificates, provided that the pledge of Net Revenues is and shall be junior and subordinate
in all respects to the pledge of Net Revenues to the payment of any obligation of the City,
whether authorized heretofore or hereafter, which the City designates as having a pledge senior
to the pledge of the Net Revenues to the payment of the Certificates. The City also reserves the
right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates
of obligation and other obligations of any kind, secured in whole or in part by a pledge of Net
Revenues, that maybe prior and superior in right to, on a parity with, or junior and subordinate
to the pledge of Net Revenues securing the Certificates.
Section 5.2: Debt Service Fund. The Combination Tax and Revenue Certificates of
Obligation, Series 2007 Debt Service Fund is hereby created as a special fund solely for the
benefit of the Certificates. 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 Certificates of Obligation, Series 2007 Debt Service Fund
shall be maintained by the City in trust for the Registered Owners of the Certificates. Such
amount, plus any other amounts deposited by the City into such fund and any and all 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 Certificates.
Section 5.3: Further Proceedings. After. the Certificates to be initially issued have been
executed, it shall be the duty of the Mayor to deliver the Certificates to be initially issued and all
pertinent records and proceedings to the Attorney General for examination and approval. After
the Certificates 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 Certificates 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 Certificates 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. Bank of America, N.A., Dallas, Texas, is hereby appointed
as the initial Paying Agent/Registrar for the Certificates 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 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 and affix the
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HOU:2'7002'71.2
City's seal. 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 AgenvKegistrar in its
capacity as Paying Agent/Registrar for the Certificates under this Ordinance (except any sums
representing Paying Agent/Registrar's fees) shall beheld 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: Certificates Presented. Subject to the provisions of Section 6A, all
matured Certificates presented to the Paying Agent/Registrar for payment shall be paid without
the necessity of further instructions from the City. Such Certificates shall be canceled as
provided herein.
Section 6.4: Unclaimed Funds Held by the Paving A eg nt/Registrar. Funds held by the
Paying Agent/Registrar that represent principal of and interest on the Certificates 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
Certificates by virtue of actions taken in compliance with this Section.
Section 6.56 Paving Agent/Registrar May Own Certificates. The Paying
Agent/Registrar in its individual or any other capacity, may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Paying Agent/Registrar,
Section 6.6: Successor Paving Agents/Re istrars. The City covenants that at all times
while any Certificates are Outstanding it will provide a legally qualified bank, trust company,
financial institution or other agency to act as Paying Agent/Registrar for the Certificates, The
City reserves the right to change the Paying Agent/Registrar for the Certificates 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 Certificates. 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.
19
HOU:2700271.2 ,
ARTICLE VII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF CERTIFICATES
Section 7.1: Sale of Certificates; Execution of Purchase Letter, Insurance, The
Certificates are hereby sold and shall be delivered to Bank of America, N.A. for a price of
$1,750,000, in accordance with the terms of and conditions in the Purchase Letter. The Purchase
Letter, substantially in the form attached hereto as Exhibit B, is hereby approved. The Mayor
and other appropriate officials of the City are hereby authorized and directed to execute the
Purchase Letter on behalf of the City, and the Mayor and all other appropriate officials, agents
and representatives of the City are hereby authorized to do any and all things necessary or
desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of
the Certificates.
Section 7.2: Approval, Registration and Delivery. The Mayor is hereby authorized to
have control and custody of the Certificates 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 Certificates and to assure the investigation,
examination and approval thereof by the Attorney General and the registration of the initial
Certificates by the Comptroller. Upon registration of the Certificates, 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 Certificates initially delivered and the seal of
the Comptroller shall be impressed or printed or lithographed thereon.
Section 7.3: Application of Proceeds of Certificates. Proceeds from the sale of the
Certificates shall, promptly upon receipt by the City, be applied as follows:
(1) Accrued interest shall be deposited into the Combination Tax and Revenue
Certificates of Obligation, Series 2007 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 Certificates;
(3) The remaining proceeds shall be applied, together with other funds of the City, to
provide funds to pay contractual obligations to be incurred for the purposes set forth in Section
3.1 of this Ordinance.
Section 7.4: Tax Exemption. The City intends that the interest on the Certificates 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 Certificates. For this purpose, the City
covenants that it will monitor and control the receipt, investment, expenditure and use of all
20
'� HOU:2700271.2
gross proceeds of the Certificates (including all property the acquisition, construction or
improvement of which is to be financed directly or indirectly with the proceeds of the
Certificates) 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
Certificates to be and remain excludable from the gross income, as defined in Section 61 of the
Code, of the owners of the Certificates 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 Certificates to (i) provide funds to pay
contractual obligations to be incurred for the purposes set forth in Section 3.1 hereof, which will
be owned and operated by the City and (ii) to pay the costs of issuing the Certificates. The City
will not use any portion of the proceeds of the Certificates 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 Certificates to constitute "private activity bonds"
within the meaning of Section 141(a) of the Code.
(c) Principal of and interest on the Certificates will be paid solely from both ad
valorem taxes and pledged revenues collected by the City, investment earnings on such
collections, and as available, proceeds of the Certificates.
(d) Based upon all facts and estimates now known or reasonably expected to be in
existence on the date the Certificates are delivered, the City reasonably expects that the proceeds
of the Certificates will not be used in a manner that would cause the Certificates or any portion
thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code.
(e) At all times while the Certificates are outstanding, the City will identify and
properly account for all amounts constituting gross proceeds of the Certificates in accordance
with the Regulations. The City will monitor the yield on the investments of the proceeds of the
Certificates 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 Certificates. To
the extent necessary to prevent the Certificates 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 Certificates to be less than the yield that is materially higher than the
yield on the Certificates.
(f) The City will not take any action or knowingly omit to take any action that, if
taken or omitted, would cause the Certificates 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
Certificates will be invested in nonpurpose 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)(11) of the Code, and the City reasonably expects that at least eighty-five
percent (85%) of the spendable proceeds of the Certificates will be used to carry out the
21
HOU:2700271.2
governmental purpose of the Certificates within the three-year period beginning on the date of
issue of the Certificates.
(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 Certificates, if 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 Certificates as maybe 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 Certificate 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, (ill) 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 Certificates 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 Certificates 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 Certificates 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
Certificates on such form and in such place as the Secretary may prescribe.
(k) The City will not issue or use the Certificates as part of an "abusive arbitrage
device" (as defined in Section 1.148-1O(a) of the Regulations). Without limiting the foregoing,
the Certificates are 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 (1)
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.
(1) Proper officers of the City charged with the responsibility for issuing the
Certificates are hereby directed to make, execute and deliver certifications as to facts, estimates
or circumstances in existence as of the date of issuance of the Certificates and stating whether
there are facts, estimates or circumstances that would materially change the City's expectations.
22
HOU:2700271.2
On or after the date of issuance of the Certificates, the City will take such actions as are
necessary and appropriate to assure the continuous accuracy of the representations contained in
such certificates.
(m) The City hereby designates the Certificates as "qualified tax-exempt obligations"
as defined in section 265(b)(3) of the Code. In furtherance of such designation, the City
represents, covenants and warrants the following$ (a) that during the calendar year in which the
Certificates are issued, the City (including any subordinate entities) has not designated nor will
designate obligations that when aggregated with the Certificates , will result in more than
$10,000,000 of "qualified tax-exempt bonds" being issued; and (b) that the City reasonably
anticipates that the amount of tax-exempt obligations issued, during the calendar year in which
the Certificates are issued, by the City (or any subordinate entities) will not exceed $10,000,000.
(n) The covenants and representations made or required by this Section are for the
benefit of the Certificate holders and any subsequent Certificate holder, and may be relied upon
by the Certificate holders and any subsequent Certificate holder 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 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 Certificates 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 7.5 all survive the defeasance and
discharge of the Certificates for as long as such matters are relevant to the exclusion of interest
on the Certificates from the gross income of the owners for federal income tax purposes.
Section 7.5: Related Matters. In order that the City shall satisfy in a timely manner all
of its obligations under this Ordinance, the Mayor, the Mayor, City Secretary and all other
appropriate officers, agents, representatives and employees of the City are hereby authorized and
Erected to take all other actions that are reasonably necessary to provide for the issuance and
delivery,of the Certificates, 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
CONTINUING DISCLOSURE UNDERTAKING
Section 8.1: Continuing Disclosure Undertaking.
Definitions. As used in this Section, the following terms have the meanings ascribed to
such terms below:
Rule means SEC Rule 15c2-12, as amended from time to time.
23
HOU:2700271.2
SEC means the United States Securities and Exchange Commission.
The Certificates are being sold pursuant to a private placement with the Purchaser, in
denominations of generally $100,000 or any integral multiple of $5,000 in excess thereof, and
therefore SEC Rule 15c2-12 is not applicable to the offering of the Certificates. Accordingly, no
contract to provide continuing disclosure information after the issuance of the Certificates has
been made by the City with investors.
ARTICLE IX
MISCELLANEOUS
Section 9.1: Defeasance. Subject to Section 10.8 hereof, the City may defease the
provisions of this Ordinance and discharge its obligations to the Registered Owners of any or all
of the Certificates 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 of Public
Accounts of the State of Texas either:
(a) cash in an amount equal to the principal�amount of such Certificates plus interest
thereon to the date of maturity or redemption; 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
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), maybe 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 or
earlier redemption;
provided, however, that if any of the Certificates are to be redeemed prior to their respective
dates of maturity, provision shall have been made for giving notice of redemption as provided in
this Ordinance. Upon such deposit, such Certificates 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.
24
HOU:2700271.2
Section 9.2: 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 Certificate 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 Certificates 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 Certificates, no such amendment,
addition, or rescission shall (i) extend the time or times of payment of the principal of and
interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate
of interest thereon, or in any other way modify the terms of payment of the principal of or
interest on the Certificates, (ii) give any preference to any Certificate over any other Certificate,
or (iii) reduce the aggregate principal amount of Certificates required to be held by Registered
Owners for consent to any such amendment, addition, or rescission.
Section 9.3: Legal Holidays. In any case where the date interest accrues and becomes
payable on the Certificates or principal of the Certificates matures or the date fixed for
redemption of any Certificates or a Record Date shall be in the City a Saturday, Sunday, legal
holiday or a day on which banking institutions 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 in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are
authorized by law to close with the same force and effect as if (i) made on the date of maturity or
the date fixed for redemption and no interest shall accrue for the period from the date of maturity
or redemption to the date of actual payment or (ii) the Record Date had occurred on the fifteenth
Jay of that calendar month.
Section 9.4: No Recourse Against City Officials. No recourse shall be had for the
payment of principal of or interest on any Certificates or for any claim based thereon or on this
Ordinance against any official of the City or any person executing any Certificates.
Section 9.5: Further Proceedings. The Mayor, Mayor Pro-Tem, City Secretary and
other appropriate officials of the City are hereby authorized and directed to do any and all things
necessary and/or convenient to carry out the terms of this Ordinance.
Section 9.6: Severability. If any
Ordinance shall for any reason be held t
Sectionparagraphclause or provision of
this
Section 9.7: 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 City Hall for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this
HOU:2700271.2
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 9.8: Repealer. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 9.9: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below.
m
HOU:2700271.2
PASSED AND APPROVED on first reading this June I8, 2007.
CITY OF SANGER, TEXAS
ATTEST
City
Exhibit A - Paying Agent/Registrar Agreement
Exhibit B - Purchase Letter
S-1
HOU:2700271.2
EXHIBIT A
PAYING AGENUREGISTRAR AGREEMENT
See Tab No. 6
HOU:2700271.2
PURCHASE LETTER
See Tab No. 5
HOU:2700271.2
ANDREWS
ATTORNEYS K U R T H LLP
December 185 2007
BY FEDERAL EXPRESS
Ms. Rosalie Chavez
City of Sanger, Texas
291 Bolivar Street
Sanger, Texas 76266
600 Travis, Suite 4200
Houston, Texas 77002
713.220.4200 Phone
713.220.4285 Fax
andrewskurth.com
Re: $1,750,000 City of Sanger, Texas Combination Tax and Revenue
Certificates of Obligation, Series 2007
Dear Ms. Chavez:
Enclosed is the transcript in connection with the referenced transaction. My
sincerest apologies for the delay in forwarding this transcript to you. If you have any
questions or need additional information, please do not hesitate to contact us.
Very truly yours,
rilyn He, og
half o Hoa beng T. Tr
9964/mh
Enclosures
Austin Beijing Dallas Houston London Los Angeles New York The Woodlands Washington, DC
PURCHASE LETTER
June 18, 200 7
City of Sanger, Texas
201 Bolivar Street
Sanger, Texas 76266
Andrews Kurth LLP
600 Travis, 42°a Floor
Houston, Texas 77002
Re: $1,750,000 City of Sanger, Texas Combination Tax and Revenue Certificates of
Obligation, Series 2007 (the "Certificates")
Ladies and Gentlemen:
We have agreed to purchase, and the City of Sanger, Texas (the "City") has agreed to sell
to us, the Certificates at the purchase price of $1,750,000, and no accrued interest. The
Certificates will bear the terms, redemption provisions, and be secured as described in the City's
Ordinance authorizing the same adopted this date, all subject to receipt by you and by us of such
opinions, the Certificates, and other documents as you or we may reasonably require to establish
the validity and legality of the Certificates.
We hereby represent and warrant that:
1. oil are (i) an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act of 1933 or (ii) a state or national bank organized under the
laws of the United States, and we have sufficient knowledge and experience in financial and
business matters, including purchase and ownership of tax-exempt municipal obligations, to be
able to evaluate the economic risks and merits of the investment represented by the purchase of
the Certificates.
2. We have made our own inquiry and analysis with respect to the Certificates and
the security therefor, and other material factors affecting the security and payment of the
Certificates, and we have not relied upon any statement by you, your officers, directors, or
employees, or your financial consultants or legal advisors in connection with such inquiry or
analysis or in connection with the offer and sale of the Certificates.
3. We have either been furnished with or have had access to all necessary
information that we desire in Ordinance to enable us to make an informed investment decision
concerning investment in the Certificates, and we have had the opportunity to ask questions and
receive answers from knowledgeable individuals concerning the purpose for which the proceeds
of the Certificates will be utilized, and the security therefor, so that we have been able to make
an informed decision to purchase the Certificates.
HOU:2700900.1
4. We are purchasing the Certificates for our own account, as evidence of a loan to
_ the City; and not with a view to, and with no present intention of, selling, pledging, transferring,
conveying, hypothecating, mortgaging, disposing, reoffering, distributing, or reselling the
Certificates, or any part or interest thereof; however, should we sell or otherwise transfer the
Certificates, we will not sell or otherwise transfer such Certificates 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.
5. We have satisfied ourselves that we may lawfully purchase the Certificates.
6. We acknowledge that the Certificates will not be rated and will not be listed on
any securities exchange. Further, no trading market now exists in the Certificates, and none may
exist in the future. Accordingly, we understand that it may need to bear the risks of this
investment for an indefinite time, since any sale prior to the maturity for the Certificates may not
be possible or may be at a price below that which we are paying for the Certificates.
7. The City hereby covenants that:
(a) It will provide us with its audited annual financial statements within 270 days
after each fiscal year end; and
(b) It agrees to deliver to us any other financial information regarding the City that
we may reasonably request from time to time.
Very truly yours,
BANK OF AMERICA, N.A.
By
Na.
Tit:
HOU:2700900. I
SIGNATURE PAGE FOR PRIVATE PLACEMENT LETTER
AGREED TO AND ACCEPTED THIS 18th DAY OF DUNE, 2007.
ATTEST:
Ci
(SEAL)
'y
r
HOU:2700900.1
PAYING AGENT/REGISTRAR AGREEMENT
THIS PAYING AGENT/REGISTRAR AGREEMENT dated as of June 15, 2007
(together with any amendments or supplements hereto, the "Agreement") is entered into by and
between the CITY OF SANGER, TEXAS (the "Issuer'), and BANK OF AMERICA, N.A.,
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 City of
Sanger, Texas Combination Tax and Revenue Certificates of Obligation, Series 2007 (the
"Certificates") in the aggregate principal amount of $1,750,000 to be issued as fully registered
certificates;
WHEREAS, all things necessary to make the Certificates the valid obligations of the
Issuer, in accordance with their 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, redemption premium, if any, and interest on the
Certificates, in accordance with the terms thereof, and under which the Bank will act as Registrar
for the Certificates; 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
Section 1.01. Appointment.
The Issuer hereby appoints the Bank to act as Paying Agent with respect to the
Certificates, to pay to the Registered Owners of the Certificates, in accordance with the terms
and provisions of this Agreement and the ordinance authorizing the issuance of the Certificates
(the "Ordinance'), the principal of, redemption premi
) um, if any, and interest on all or any of the
Certificates.
The Issuer hereby appoints the Bank as Registrar with respect to the Certificates.
HOU:2700295.1
The Bank hereby accepts its appointment, and agrees to act as Paying Agent and
Registrar with respect to the Certificates.
Section 1.02, Compensation.
In consideration of the sale of the Security to the Bank by the Issuer, no compensation
will be owing to the Bank for its services hereunder.
DEFINITIONS
Section 2.01. Definitions.
', For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires.
"Bank" means Bank of America, N.A., Dallas, Texas, a commercial bank which is a
national bank duly organized and existing under the laws of the United States of America.
"Certificate" or "Certificates" means any one or all of the "City of Sanger, Texas
Combination Tax and Revenue Certificates of Obligation, Series 2007" authorized by the
Ordinance.
"Issuer" means the City of Sanger, Texas.
"Ordinance" means the ordinance of the Issuer approved by its City Council on June 18,
2007, pursuant to which the Certificates are issued.
"Paying Agent" means the Bank when it is performing the function of paying agent.
"Person" means any individual, corporation, partnership, joint venture, associations, 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.
"Registered Owner" means the Person in whose name any Certificate is registered in the
books of registration maintained by the Bank under this Agreement.
All other capitalized terms shall have the meanings assigned to them in the Ordinance.
2
HOU:2700295.1
1 � i
Section 3.01. Initial Delivery of the Certificates.
The Certificates will be initially registered and delivered by the Bank to the purchaser
designated by the Issuer as set forth in the Ordinance. If such purchaser delivers a written
request to the Bank not later than five business days prior to the date of initial delivery, the Bank
will, on the date of initial delivery, exchange the Certificates initially delivered for Certificates of
authorized denominations, registered in accordance with the instructions in such request and the
Ordinance.
Section 3.02. Duties of Pai�ng Agent.
As Paying Agent, the Bank shall, provided adequate funds have been provided to it for
such purpose by or on behalf of the Issuer, timely pay on behalf of the Issuer the principal of and
interest on each Certificate in accordance with the provisions of the Ordinance.
If the issue is to be Depository Trust Company (DTC)
comply with all eligibility requirements as outlined and
questionnaire.
Section 3.03. Duties of Registrar.
eligible, the Paying Agent will
agreed upon in the eligibility
The Bank shall provide for the proper registration of the Certificates and the timely
exchange, replacement and registration of transfer of the Certificates 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 Bank's general practices and
procedures in effect from time to time; provided, however, that the Bank agrees to maintain
books of registration for the Certificates at the City Secretary's office in City of Sanger, Texas,
which books' of registration may be a copy of the register which shall be kept current by the
Bank.
Section 3.04. Unauthenticated Certificates.
The Issuer shall provide an adequate inventory of unauthenticated Certificates to
facilitate transfers. The Bank covenants that it will maintain such unauthenticated Certificates in
safekeeping and will use reasonable care in maintaining such Certificates 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 bonds.
3
HOU:2700295.1
Section 3.05. Reports.
Upon request of the Issuer, the Bank will provide the Issuer reports which will describe in
reasonable detail all transactions pertaining to the Certificates and the books of registration for
the period of time specified by the Issuer. The Issuer may also inspect and make copies of the
information in the books of registration and such other documents related to the Certificates and
in the Bank's possession 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.
The Bank will not release or disclose the content of the books of registration to any
person other than to, or at the written request of, an authorized officer or employee of the Issuer,
except upon receipt of a subpoena, court order or as otherwise required by law. Upon receipt of
a subpoena, court order or other lawful request, the Bank will notify the Issuer immediately so
that the Issuer may contest the subpoena, court order or other request if it so chooses.
Section 3.06. Canceled Certificates.
All Certificates surrendered for payment, redemption, 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 Certificates
previously authenticated and delivered which the Issuer may have acquired in any manner
whatsoever, and all Certificates so delivered shall be promptly canceled by the Bank. All
canceled Certificates held by the Bank shall be destroyed and evidence of such destruction shall
be furnished to the Issuer.
Section 3.07. Reliance on Documents Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer.
' (b) 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 gence, reasonableness and care, as prescribed
by law, with regard to its duties hereunder.
(c) This Agreement is not intended to require the Bank to expend its own funds for
performance of any of its duties hereunder.
(d) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys.
(e) The Bank is also authorized to transfer funds relating to the closing and initial
delivery of the securities in the manner disclosed in the closing memorandum approved by the
Issuer as prepared by the Issuer's financial advisor or other agent. The Bank may act on a
4
HOU:2700295.1
facsimile transmission of the closing memorandum to be followed by an original of the closing
memorandum signed by the financial advisor or the Issuer.
Section 3.08. Money Held by Bank.
Money held by the Bank hereunder shall be held in trust for the benefit of the Registered
Owners of the Certificates.
The Bank shall be under no obligation to pay interest on any money received by it
hereunder.
All money deposited with the Bank hereunder shall be secured in the manner and to the
fullest extent required by law for the security of funds of the Issuer.
Any money deposited with the Bank for the payment of the principal of or interest on any
Certificates 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 funds, 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
Owners of the Certificates by virtue of actions taken in compliance with the foregoing provision.
ARTICLE FOUR
MISCELLANEOUS PROVISIONS
Section 4.01. MU Own Certificates.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Paying Agent and Registrar for
the Certificates.
Section 4.02. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereof.
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,
5
HOU:2700295.1
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' 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. This Agreement shall not be assigned by
the Bank without the prior written consent of the Issuer.
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.
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. The Bank agrees to be
bound by the terms of the Ordinance with respect to the Certificates.
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. In the event of early termination, regardless of circumstances,
the Bank shall deliver to the Issuer or its designee all funds, Certificates and all books and
records pertaining to the Bank's role as Paying Agent and Registrar with respect to the
Certificates, including, but not limited to, the books of registration.
6
HOU:2700295.1
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.
fIl
HOU:2700295.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
CITY OF SANGER, TEXAS
By:
ADDRESS: 201 Bolivar Street
Sanger, Texas 76266
ATTEST:
HOU:2700295.1
BANK OF AMERICA, N.A.
By:
Name:
Title:
HOU:2700295.1
GENERAL CERTIFICATE
STATE OF TEXAS
COUNTY OF DENTON
CITY OF SANGER
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
$1,750,000 CITY OF SANGER, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2007, dated June 15, 2007 (the "Certificates"), now in the process of issuance, as follows:
(1) The City is a duly incorporated Home Rule City, having more than 51000 inhabitants, operating
and existing under the Constitution and laws of the State of Texas and the duly adopted Home Rule Charter of the
City, which Charter has not been changed since the approval by the Attorney General of the State of Texas of the
City of Sanger, Texas Combination Tax and Revenue Certificates of Obligation, Series 2006, dated August 15,
2006, which were the last obligations issued by or on behalf of the City.
(2) The Certificates are being issued to provide funds to pay contractual obligations to be incurred for
(1) to acquire and renovate a building and parking area to be used by the City's public works department; (2) to
purchase phone, alarm and computer equipment and office furniture for such building; and (3) the payment for
professional services related thereto.
(3) 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 2006, 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 $334,619,503,
(4) The following individuals were the duly elected and qualified Mayor, and City Council of the City
holding the offices opposite their names:
Joe Higgs
Mike James
Glenn Ervin
Mike Walker
Andy Garza
Robert Patton
Mayor
Councilman, Place 1
Councilman, Place 2
Councilman, Place 3
Councilman, Place 4
Councilman, Place 5
(6) Rosalie Chavez has been the duly appointed and qualified City Secretary of the City.
(7) The Certificates were sold at par by means of notice and bid to Bank of America, N.A.
(8) Save and except for the pledge of the Net Revenues of the System to the payment of the
Certificates and the City's Certificates of Obligation, Series 1994, Combination Tax and Revenue Certificates of
Obligation, Series 2002, and Combination Tax and Revenue Certificates of Obligation, Series 2006, the Net
Revenues of the System have not been pledged in any other manner or for any other purpose, and the pledge of the
Net Revenues of the System to the Certificates evidences the only lien, encumbrance, or indebtedness of the System
or against Net Revenues of the System.
(9) Attached to this certificate as Exhibit A is a true, full and correct debt service schedule for the
Certificates. 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 Certificates. The principal amount of the City's total outstanding tax supported
debt, including the Certificates, is $10,895,000,
HOU:2700296.1
(9) The following is a true, full and current schedule of System revenues, remaining after the payment
of all operation and maintenance expenses thereof ("Net Revenues"), for the last three fiscal years$
Fiscal Year Ended September 30,
2004 2005 2006
$1,024,668 $148,434 $4533493
(10) The current monthly rates and charges for services provided by the System are as follows:
Water Rates:
Residential
Customers
Minimum per unit served for 0-1,000 gallons
$15.25
Next 4,000 gallons
2.35 per thousand gallons
Next 10,000 gallons
2.60
per thousand gallons
Next 15,000 gallons
3.05
per thousand gallons
Over 30,000
3.90
per thousand gallons
Commercial
Customers
Minimum per unit served for 0-1,000 gallons
$18.00
Next 4,000 gallons
2.75 per thousand gallons
Next 10,000 gallons
3.00 per thousand gallons
Next 15,000 gallons
3.25 per thousand gallons
Over 30,000
4.00 per thousand gallons
Sewer Rates:
Residential
Customers
first 1,000 allons
$16.00
allons over first 1,000 allons
1.00
E
30.00
l Customers
inch meter
$22.00
1 inch meter
24.00
1 %: inch meter
28.00
2 inch meter
33.00
3 inch meter
41.00
4 inch meter
76.00
Per 1,000 gallons over first 1,000 gallons
1.00
Multi-Famil
Dwellin s
Amount due shall be the residential rate
multiplied by the number of occupied dwelling
units
(11) The City is not in default as to any covenant, condition or obligation on any prior bonds or other
obligations payable from the Net Revenues of the System.
2
HOU:2700296.1
SIGNED AND SEALED this June 18, 2007.
City Secretary'
(CITY SEAL)
CITY OF BANGER, TEXAS
3
HOU:2700296.1
Ezhihit A
Debt Service Schedule for the Certificates
HOU:2700296.1
Ezhibit B
Debt Service Schedule for All of the City's Outstanding Taz Supported Debt
HOU:2700296.1
Total Outstanding General Obligation/Tax Supported Debt
As of 6/11/2007 Including Proposed 2007 CO's
Principal Interest Annual Total
Dates Amount Amount Total P&I FY Begins 10/01
9/1/2007 $585,000*00 $200,236*25 $785,236*25 $982,517M
3/1/2008 $186,063.75 $186,063*75
8/1/2008 $50,000*00 $82,988.89 $1329988.89
9/1/2008 $615,000.00 $186,063*75 $801,06175 $1,120,116.39
2/1/2009 $371400.00 $37,400*00
3/1/2009 $171,098.75 $171,098*75
8/1/2009 $60,000.00 $37,400.00 $97,400.00
9/1/2009 $6451000.00 $171,098*75 $816109815 $1,121,997.50
2/1/2010 $36,080.00 $36,080.00
3/1/2010 $155,391.25 $155,391.25
8/1/2010 $60,000.00 $36,080*00 $96,080.00
9/1/2010 $4651000.00 $155,391.25 $620,391 *25 $907,942.50
2/1/2011 $34,760900 $34,760.00
3/1/2011 $145,666*25 $145,666425
8/1/2011 $65,000.00 $34,760.00 $99,760*00
9/1/2011 $485,000*00 $145,666.25 $630,666*25 $910,852.50
2/1/2012 $33,330900 $33,330*00
3/1/2012 $135,861*25 $135,861,25
8/1/2012 $65,000.00 $33,330*00 $98,330.00
9/1/2012 $505,000M $135,861.25 $640,861*25 $908,382050
2/1/2013 $31,900M $31,900*00
3/1/2013 $125,596.25 $125,596.25
8/1/2013 $70,000*00 $31,900A0 $101,900000
9/1/2013 $530,000*00 $125,596.25 $655,596*25 $914,992.50
2/1/2014 $30t360*00 $30,360*00
3/1/2014 $114,756.25 $114,756.25
8/1/2014 $751000.00 $30,360.00 $105,360.00
9/1/2014 $550,000.00 $114,756.25 $664,756*25 $915,232*50
2/1/2015 $28,710.00 $28,710900
3/1/2015 $103,44315 $103144175
8/1/2015 $751000.00 $28,710*00 $103,710.00
9/1/2015 $570,000.00 $103,44175 $673,443*75 $909,307.50
2/1/2016 $27,060*00 $27,060A0
3/1/2016 $91,718.75 $91,71835
8/1/2016 $801000.00 $27,060A0 $107,060.00
9/1/2016 $595,000000 $91,718.75 $686,718*75 $912,557.50
2/1/2017 $25,300*00 $25,300.00
3/1/2017 $77,11315 $77,11315
8/1/2017 $85,000.00 $25,300*00 $110;300*00
9/1/2017 $630,000000 $77,11315 $707,113.75 $919,827950
2/1/2018 $23,430.00 $23,430A0
3/1/2018 $64,006*25 $64,006.25
8/1/2018 $85,000.00 $23,430*00 $108,430.00
9/1/2018 $650,000400 $64,006*25 $714,006.25 $909,872650
2/1/2019 $21,560.00 $21,560.00
3/1/2019 $50,31815 $50,318.75
8/1/2019 $90,000000 $21,560*00 $111,560A0
9/1/2019 $680,000000 $50,318.75 $730,318*75 $913,757M
2/1/2020 $191580A0 $19,580*00
3/1/2020 $35,868,75 $35,868*75
8/1/2020 $95,000*00 $19,580*00 $114,580.00
9/1/2020 $715,000000 $35,868*75 $750,868.75 $920,897M
2/1/2021 $17,490A0 $171490A0
3/1/2021 $20582M $20t582*50
8/1/2021 $100*000000 $17,490.00 $117,490.00
9/1/2021 $740,000.00 $20,58150 $760,582M $916,145.00
2/1/2022 $15,290.00 $15,290A0
3/1/2022 $4,625*00 $4,625*00
8/1/2022 $105,000.00 $15,290.00 $120,290*00
9/1/2022 $185,000.00 $4,625.00 $1892625*00 $329,830.00
2/1/2023 $12,980*00 $12,980.00
8/1/2023 $110,000000 $12,980.00 $122,980*00 $135,960A0
2/1/2024 $10,560.00 $109560A0
8/1/2024 $110,000600 $10,560A0 $120,560.00 $131,120.00
2/1/2025 $8,140.00 $8,140.00
8/1/2025 $115,000900 $8,140A0 $123,140*00 $131,280.00
2/1/2026 $5,610*00 $5,610.00
8/1/2026 $1251000M $5,610.00 $130,610*00 $130,610A0
2/1/2027 $2,860*00 $2,860.00
8/1/2027 $130.000.00 2 860.00 $132*860*00 $135.720.00
Totals $10,895,000.00 $4,092,247.64 $14,9879247.64 $159178,918.92
Issue Prin Amt
CO Series 1994 $565,000
CO Series 2002 $2,080,000
CO Series 2006 $61500,000
CO Series 2007 $1 J50,000
Totals $10,895,000
SIGNATURE IDENTIFICATION AND
NO -LITIGATION CERTIFICATE
THE STATE OF TEXAS §
COUNTY OF DENTON §
CITY OF SANGER §
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 certificates of obligation, to wit.
CITY OF SANGER, TEXAS COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2007, dated June 15, 2007, and
aggregating $1,750,000 (the "Certificates'),
That the Certificates have 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 each of the Certificates,
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 Certificates, and holding the official titles set
forth below opposite such signatures.
We further certify that no litigation is pending or, to our knowledge, threatened in any court
in any way affecting the existence or boundaries of the City or the titles of its officers to their
respective positions or their authority to act on the City's behalf or to restrain or enjoin the issuance
or delivery of the Certificates, 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 Certificates, or the
pledge thereof, or in any way contesting or affecting the validity of the Certificates, the ordinance
dated June 18, 2007, authorizing the issuance, sale and delivery of the Certificates (the
"Ordinance"), or contesting the powers of the City or the authorization of the Certificates or the
Ordinance.
We further certify that the seal that has been impressed, or placed in facsimile, upon each of
the Certificates is the legally adopted, proper and only official seal of the City, such official seal
being impressed upon this certificate.
We further certify that no petition or other request has been filed with or presented to any
official of the City requesting that any of the proceedings authorizing the Certificates be submitted
to a referendum or other election.
i
HOU:2700313.1
We further certify that the information and data contained in the General Certificate dated
June 18, 2007 remain true and correct as of this date.
WITNESS OUR HANDS AND THE SEAL OF THE CITY this
SIGNATURES
r
� c
/1
TITLE OF OFFICE
Mayor,
City of Sanger, Texas
City Secretary,
City of Sanger, Texas
2007.
Before me, on this day personally appeared the foregoing individuals, known to me to be the
persons whose names were subscribed in my presence to the foregoing instrument.
h
Given under my hand and seal of office this `��"
1VUldIy I"UDi1G
Typed or Printed Name:
My Commission Expires:
Z�l�
Cvl
HOU:2700313. I
FEDERAL TAX CERTIFICATE
CITY OF SANGER, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION , SERIES 2007
I, the undersigned officer of the City of Sanger, Texas, a political subdivision of the State
of Texas (together with any successor to its duties and functions, the "City") 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 City's
Combination Tax and Revenue Certificates of Obligation, Series 2007 (the "Certificates") in the
aggregate principal amount of $1,750,000, 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 City for the office
shown below my signature. In such capacity, I am charged, along with others, with
responsibility for issuing the Certificates. 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 ordinance adopted on June 18, 2007, authorizing the issuance
of the Certificates (the "Ordinance"), and particularly the provisions thereof relating to the
treatment of the Certificates 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 1.1414 through 1.141-15, 1.14&0 through
1.148415 1.149(d), 1.149(g)-1, 1.1504 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 City responsible for issuing the
Certificates, the undersigned hereby certes, in good faith, that the City's expectations, as of the
Issue Date (as defined herein), regarding the amount and use of the gross proceeds of the
Certificates and other matters relevant to the treatment of interest on the Certificates 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 Bank of America, N.A. the Purchaser, with respect to the Certificates
the "Purchaser") in the Certificate of Purchaser, attached hereto as Exhibit A and certain
representations of Government Capital Securities Corporation, the financial advisor to the City
(the "Financial Advisor") in the Certificate of Financial Advisor, attached hereto as Exhibit B.
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 City is issuing the Certificates
pursuant to the Ordinance to provide funds, which will be used to finance:
DAL:672045.1
(a) to acquire and renovate a building and parking area to be used by the
City's public works department and to purchase phone, alarm and computer
equipment and office furniture for such building (the "Project"); and
(b) to pay the costs issuing the Certificates.
4. Proceeds of the Certificates. The sales proceeds from the sale of the Certificates is
$1,750,000.00 which represents the aggregate principal amount of the Certificates.
5. Use of Proceeds of the Certificates. The sales proceeds from the sale of the
Certificates will be expended and applied by the City as follows:
(a) Proceeds of the Certificates in the amount of $1,720,000.00 will be
used by the City to pay costs of the Project.
(b) Proceeds of the Certificates in the amount of approximately
$29,850.00 will be used by the City to pay costs of issuance of the Certificates.
(c) Proceeds of the Certificates in the amount of $150.00 represents a
rounding amount that will be used to pay additional costs of issuance, if any,
and thereafter will be deposited n the Debt Service Fund (as defined below) to
be used on August 1, 2008, to pay interest on the Certificates.
6. No Pre -Issuance Accrued Interest. Interest on the Certificates begins to accrue on
Issue Date; therefore, the Certificates are being issued without pre -issuance accrued interest.
7. Investment Proceeds. Earnings on the investment of proceeds of the Certificates
described in paragraph 5(a) will be used in addition to the amounts described in paragraph 5(a) 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(a) and the investment earnings thereon which
are to be used to pay costs of the Project. Earnings on the investment of proceeds of the
Certificates described in paragraph 5(b) will be used in addition to the amounts described in
paragraph 5(b) to pay the costs of issuance of the Certificates. Earnings on the investment of
proceeds of the Certificates described in paragraph 5(c) will be used for the purposes described
in paragraphs 5(c).
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 Certificates and
amounts to be held in the Debt Service Fund for the payment of debt service on the Certificates
(as discussed in paragraph 12) which have or will have at any time a sufficiently direct nexus to
the Certificates or to any governmental purpose of the Certificates to conclude that such amounts
would have been used for that governmental purpose if the proceeds of the Certificates 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 Certificates are outstanding --
-2-
DAL:672045.1
(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 Certificates; and
(ii) any fund, amount, or investment that is directly or indirectly
pledged to pay principal or interest on the Certificates. 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
City 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 Certificates. Based on the reasonable expectations of the City
as of the date hereof, the term of the Certificates is not longer than, and the City will not
aHow the Certificates to remain outstanding longer than, is reasonably necessary for the
governmental purposes for which the Certificates are being issued. The weighted
average maturity of the Certificates does not exceed 120 percent of the reasonably
expected economic life of the capital projects being financed by the Certificates,
determined in the same manner as provided under Section 147(b) of the Code. In
addition, none of the proceeds of the Certificates 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 Certificates, plus all investment proceeds to
be received with respect to the Certificates, does not exceed by any amount, the amount required
for the governmental purposes for which the Certificates are being issued, as described in
paragraph 3 above.
10. Temporary Period Requirements for the Certificates.
(a) Expenditure Test. The City expects at least 85 percent of the net sale
proceeds of the Certificates will have been expended prior to July 33 2010 for costs of the
Project. All net sale proceeds of the Certificates not expended prior to July 3, 2010 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 Certificates, except as
set forth in paragraph 18 below.
(b) Time Test. The City has incurred or will incur within six months of the date
hereof a substantial binding obligation to a third party pursuant to which the City is
obligated to expend at least five percent of the net sale proceeds of the Certificates on the
Proj ect.
(c) Due Diligence. The City expects that the Project will proceed with due
diligence to completion and that the net sale proceeds of the Certificates will be expended
on the Project with reasonable dispatch.
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DAL:672045.1
(d) Investment Proceeds. The City expects that all amounts derived from the
investment of monies received from the sale of the Certificates 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 Certificates 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 Certificates, except as provided in paragraph 18 below.
The term "net sale proceeds" shall mean any amount actually or constructively received
from the sale of the Certificates, 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 Certificates.
11. Flow of Funds. Under the Certificates, the City is obligated to levy, assess and
collect an ad valorem tax on property located in the City in an amount sufficient to pay debt
service on the Certificates. All taxes levied, assessed and collected by the City for and on
account of the Certificates will be deposited into the Debt Service Fund.
12. Debt Service Fund. The City created pursuant to the Ordinance the Combination
Tax and Revenue Certificates of Obligation, Series 2007 Debt Service Fund (the "Debt Service
Fund") to be used primarily to achieve a proper matching of revenues and debt service on the
Certificates within each bond year. The City expects that the taxes levied, assessed and 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 Certificates. The City will adjust the annual tax
rates as necessary, taking into account other moneys available or to be available for the payment
of debt service on the Certificates. The portion of the Debt Service Fund which will be depleted
by the payment of debt service on the Certificates 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 Certificates, remaining in the
Debt Service Fund, after the annual payment of all principal of and interest and premium, if any,
on the Certificates, 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 City 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 Certificates 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
Certificates, or (z) 125 percent of the average annual principal and interest requirement on the
Certificates, at any time so long as the Certificates are 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 Certificates, except as set forth in paragraph 18 below.
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DAL:672045.1
13. Issue Price. The term "Issue Price," with respect to the entire issue of Certificates,
means the aggregate of the initial offering prices for all of the Certificates, plus pre -issuance
accrued interest as of date of issue on the entire issue of Certificates (unless as otherwise
indicated herein). For substantially identical Certificates, the Issue Price is the first price at
which a substantial amount (i.e., at least ten percent) was sold to the public (excluding bond
houses, brokers or similar persons or organizations acting in the capacity of underwriters and
wholesalers). Based on the foregoing and on the Certificate of Purchaser attached as Exhibit A
and incorporated herein by reference, the Issue Price of the Certificates, without taking into
account any costs of issuance or pre -issuance accrued interest, is $1,750,000.00.
14. Yield on the Certificates. 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 Certificates, 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 Certificates produces an amount equal to (i) the Issue
Price of the Certificates, plus (ii) pre -issuance accrued interest on the Certificates as of the Issue
Date. Yield on the Certificates shall not take into account or reflect any underwriter's discount
or cost of issuance of the Certificates. For purposes hereof, yield is and shall be calculated on
the basis of a 360-day year with interest compounded semi-annually.
The yield with respect to the Certificates subject to optional redemption is computed by
treating each Certificate as retired at the stated redemption price on the final maturity date
because (i) the City has no present intention to redeem prior to maturity the Certificates which
are subject to optional redemption, (ii) no Certificate is subject to optional redemption at any
time for a price less than the retirement price at final maturity plus accrued interest, (iii) no
Certificate subject to optional redemption is issued at an Issue Price that exceeds the stated
redemption price at maturity of such Certificate by more than one-fourth of one percent
multiplied by the product of the stated redemption price at maturity of such Certificate and the
number of complete years to the first optional redemption date for such Certificate; and (iv) no
Certificate subject to optional redemption bears interest at a rate that increases during the term of
the Certificate.
The Certificates are subject to mandatory redemption. The yield on'the Certificates is
calculated by treating the outstanding stated principal amounts payable on the mandatory
redemption dates as payments on such dates based on representations of the Financial Advisor
that the stated redemption price at maturity of the Certificates does not exceed the issue price of
the Certificates by more than one-fourth of one percent multiplied by the product of the stated
redemption price at maturity and the number of years to the date of the weighted average
maturity (determined by taking into account the mandatory redemption schedule) of the
Certificates.
The yield on the Certificates, calculated in this manner and as stated in the Certificate of
Financial Advisor, attached hereto as Exhibit B, is 4.39351035 percent.
15. Qualified Tax -Exempt Obligations. Section 265 of the Code permits designation of
governmental obligations such as the Certificates as "qualified -tax-exempt obligations." The
Certificates have been, or are hereby, designated by the City as a "qualified tax-exempt
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DAL:672045.1
obligations" for purposes of Section 265(b)(3) of the Code. The Certificates are not private
activity bonds within the meaning of Section 141(a) of the Code. The City (and all entities
related to the City) does not reasonably expect to issue, and will not designate, tax-exempt
obligations, including the City, in an aggregate amount (based in each case on the higher of the
principal amount or the issue price) in excess of $10,000,000 during the calendar year 2007.
16. Other Issues. There are no obligations issued by the City or any related party of the
City which (a) are sold at the same time as the Certificates (within 15 days), (b) are reasonably
expected to be paid from the same source of funds as the Certificates and (c) have been or will be
sold pursuant to the same plan of financing as the Certificates.
17. 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 City (a)
which are expected to be used, or expected to generate earnings to be used, to pay debt service
on the Certificates, or which are reserved or pledged as collateral for payment of debt service on
the Certificates and (b) for which there is reasonable assurance that amounts therein will be
available to pay debt service on the Certificates if the City encounters financial difficulties. Use
of amounts in the Debt Service 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
Certificates.
18. Minor Portion. The City expects that the gross proceeds of the Certificates,
including all proceeds received with respect to the Certificates 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 Certificates, 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 City 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 Certificates or $100,000 in the
aggregate, at a yield not materially higher than the yield on the Certificates.
19. Compliance with Rebate Requirements
(a) General. The City has covenanted in the Ordinance that, unless the
Certificates meet 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 Certificates, within the meaning of Section 148(f) of the Code, be
rebated to the federal government. Specifically, the City will (i) maintain separate
records regarding the amount and timing of disbursements of proceeds of the Certificates
(ii) maintain records regarding the investment of the gross proceeds of the Certificates as
may be required to calculate the amount earned on the investment of the gross proceeds
of the Certificates which are part of a reasonably required reserve or replacement fund
separately from records of amounts in other funds or accounts maintained for the
Certificates amounts on deposit in the funds and accounts of the City allocable to other
bond issues of the City or moneys which do not represent gross proceeds of any
obligation of the City (iii) calculate at such times as required by applicable Regulations,
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DAL:672045.1
the rebatable amount earned from the investment of the gross proceeds of any obligation
of the City, (iv) calculate at such times as required by applicable Regulations, the
rebatable amount earned from the investment of the gross proceeds of the Certificates
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 Certificates 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 City
acknowledges that the purposes of compliance with Section 148 of the Code, gross
proceeds of the Certificates 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 City will employ accountants or other persons with expertise in
performing the rebate calculations as is necessary to insure compliance with the Code.
The City will employ legal counsel as is necessary to resolve the interpretive issues
involved in complying with the rebate requirements of the Code. Further, the City 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 Certificates. In
the event that the City fails to comply with the rebate requirements of the Code, the City
agrees to take all steps available under the Code to bring the Certificates into compliance
with the Code; such steps include paying any penalty, interest or other amounts which
will allow the City to return to compliance with the rebate requirements of the Code. If
the City is required to pay rebate or other amounts, such as penalties and interest, to the
United States with respect to the Certificates pursuant to Section 148(f) of the Code in
order to prevent the Certificates from constituting arbitrage bonds or being otherwise
classified or treated such that interest on the Certificates would not be excludable from
the gross income of the holders thereof for federal income tax purposes, the City will
timely make such payments from available funds of the City and the City reasonably
expects that it will have the ability to make such payments from available funds of the
City in the event such payments become necessary. The undersigned reasonably expects
that the City will fulfill its covenants and representations in this regard.
(b) Small Issuer Exception to Rebate. Section 148(f) of the Code
provides that if each of the conditions specified in paragraphs (a) through (d) set forth below are
applicable to the City and the Certificates, the City will not be required to rebate excess arbitrage
profits to the United States. The City hereby represents that the following conditions of this
paragraph are applicable to the City and the Certificates:
(b) the City is a governmental unit with general taxing powers;
(c) the Certificates are not private activity bonds within the meaning of section
141(a) of the Code;
(d) 95% or more of the net proceeds of the Certificates will be used for local
governmental activities of the City; and
(e) the aggregate face amount of all tax exempt obligations, other than private
activity bonds, issued by the City, and all subordinate entities thereof, if any, during the
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DAL:672045.1
calendar year in which the Certificates are issued is not reasonably expected to exceed
$5,000,000.
20. Not a Refunding. No portion of the proceeds of the Certificates are expected to be
used to pay any interest on or principal of any issue of governmental obligations other than the
Certificates.
21. 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 Certificates, none of the proceeds of the Certificates will be allocated to, or otherwise
used, to reimburse any expenditure paid, either actually or constructively, by the City prior to the
Issue Date.
22. Not a Hedge Bond. Not more than 50 percent of the proceeds of the Certificates 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 City reasonably expects that at least 85 percent of
the spendable proceeds of the Certificates will be used to carry out the governmental purposes of
the Certificates within the three-year period beginning on the date the Certificates were issued.
23. No Change In Use. The City does not expect to dispose of any portion of the Project
related to the Certificates, or to change the use of the proceeds of the Certificates while any of
the Certificates are outstanding.
24. No Abusive Arbitrage Device. The Certificates are 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 Certificates are 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, and (ii) increasing
the burden on the market for tax-exempt obligations. In this regard, the City issued the
Certificates for the primary purpose of accomplishing the bona fide governmental purposes set
forth �n paragraph 3 of this Certificate. Based on all the facts and circumstances, the City has not
issued the Certificates in an amount higher than is reasonably necessary to accomplish the
governmental purposes of the Certificates, the City has not issued the Certificates earlier than is
reasonably necessary to accomplish the governmental purposes of the Certificates and the City is
not allowing the Certificates to remain outstanding longer than is reasonably necessary to
accomplish the governmental purposes of the Certificates. The City would have issued the
Certificates regardless of any arbitrage benefit, which it may realize in connection with the
Certificates. In fact, the City reasonably expects that even if the Certificates were 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 Certificates are in fact now being issued, the
City would have issued the Certificates, 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 Certificates has a
maturity determined primarily for the purpose of creating a sinking fund with respect to
DAL:672045.1
the Certificates the yield on which will be blended with the yield on the investment of
other proceeds of the Certificates 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 Certificates (and that is directly related to capital expenditures
financed by the Certificates), the City will only expend proceeds of the Certificates for
(i) costs that would be chargeable to the capital accounts of the Project if the City's
income were subject to federal income taxation and (ii) interest on the Certificates in an
amount that does not cause the aggregate amount of interest paid on all of the Certificates
to exceed that amount of interest on the Certificates 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 Certificates 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
Certificates has been or will be used to acquire, finance or refinance a conduit loan.
25. Allocations and Accounting. The proceeds of the Certificates 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 Certificates, if earlier. The
allocation of proceeds will be made by employing the direct -tracing method of accounting,
unless the City elects otherwise.
26. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is
expected that the proceeds of the Certificates will not be used in a manner that would cause any
of the Certificates 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.
27. No Private Use, Payments or Loan Financing.
(a) General. The City reasonably expects, as of the date hereof, that no action or
event during the entire stated term of the Certificates 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 Certificates will be used in a
trade or business of a nongovernmental person. For purposes of determining use,
the City will apply rules set forth in applicable Regulations and Revenue
Procedures 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 Certificates is treated as the direct use of proceeds; (C) a
nongovernmental person will be treated as a private business user of proceeds of
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DAL:672045.1
the Certificates 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 Certificates.
(ii) The City 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 Certificates 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 Certificates 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
Certificates). For this purpose any action within the control of the City is treated
as a deliberate action. A deliberate action occurs on the date the City enters into a
binding contract with a nongovernmental person for use of the proceeds of the
Certificates that is not subject to any material contingencies.
(iii) No portion of the proceeds of the Certificates 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 Certificates 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 Certificates
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 be not 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) The City is required to deposit amounts received from such
disposition in a commingled fund with substantial tax or other governmental
revenues and the City reasonably expects to spend such amounts on governmental
programs within 6 months from the date of commingling.
28. Weighted Average Maturity. As calculated by the Financial Advisor in the manner
described below and set forth in the Certificate of Financial Advisor, Exhibit B hereto, the
weighted average maturity of the Certificates is 12.049 years which is the sum of the products of
the Issue Price of each group of identical Certificates and the number of years to maturity
(determined separately for each group of identical Certificates and taking into account mandatory
redemptions), divided by the aggregate sale proceeds of the Certificates.
-10-
- DAL:672045.1
[SIGNATURE PAGE FOLLOWS]
-11-
DAL:672045.1
WITNESS MY HAND, this I day of J U�, , 2007.
CITY OF SANGER, TEXAS
By:
it
Titl
EXHIBIT A —Certificate of Underwriter
EXHIBIT B — Certificate of Financial Advisor
i�
L
L
l
1
HOU:2702192.1
- - CERTIFICATE OF PURCHASER
The undersigned hereby certifies with respect to the sale of the City of Sanger, Texas
Combination Tax and Revenue Certificates of Obligation, Series 2007 (the "Certificates"), as
follows:
1. The undersigned is a duly authorized representative of Bank of America, N.A., Inc.
("the Purchaser"), that purchased the Certificates from the City of Sanger, Texas (the "City"),
pursuant to a negotiated sale. In this capacity, the undersigned is familiar with the facts stated
herein.
2. The Purchaser purchased the Certificates for $1,750,000 for its own account and not
for resale.
Based on the foregoing, the Issue Price of the Certificates (without taking into account
costs of issuance orpre-issuance accrued interest), is $1,750,000.00.
[SIGNATURE PAGE FOLLOWS]
A-1
DAL:672045.1
The Purchaser hereby authorizes the City to rely on the statements made herein in
connection with making the representations set forth in the Federal Tax Certificate to which this
Certificate is attached and in connection with compliance by the City with the provisions of the
Code regarding the exclusion from gross income of the interest on the Certificates. Further, we
hereby authorize Andrews Kurth LLP, Bond Counsel to the City to rely on the statements made
herein in connection with its opinion that interest on the Certificates is excludable from gross
income for federal income tax purposes.
EXECUTED and DELIVERED as of and on July 3, 2007.
BANK OF AMERICA, N.A.
Name:
Title:
A-2
DAL:672045.1
CERTIFICATE OF FINANCIAL ADVISOR
The undersigned hereby certifies with respect to the sale of $1,750,000 Combination Tax
and Revenue Certificates of Obligation, Series 2007 (the "Certificates"), as follows:
1. The undersigned is a duly authorized representative of Government Capital
Securities Corporation, the financial advisor (the "Financial Advisor") to City of Sanger, Texas
(the "City") in connection with the sale and delivery of the Certificates. In this capacity, the
undersigned is familiar with the facts stated herein.
2. The term "yield" shall have the meaning ascribed to it in Section 148(h) of the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. In the
case of the Certificates, the term "yield" means that interest rate which when used as a discount
factor in computing the present value as of the date hereof of all scheduled payments of principal
of and interest on the Certificates produces an amount equal to the Issue Price of the Certificates,
plus pre -issuance accrued interest. No underwriters' discount, issuance costs, or costs of carrying
or repaying the Certificates has been taken into account for purposes of computing the yield on
the Certificates. For purposes hereof, yield shall be calculated on the basis of a 360-day year with
interest compounded semi-annually.
The yield with respect to the Certificates subject to optional redemption is computed by
treating each Certificate as retired at the stated redemption price on the final maturity date
because (i) the City has no present intention to redeem prior to maturity the Certificates which
are subject to optional redemption, (ii) no Certificate is subject to optional redemption at any
time for a price less than the retirement price at final maturity plus accrued interest, (iii) no
Certificate subject to optional redemption is issued at an Issue Price that exceeds the stated
redemption price at maturity of such Certificate by more than one-fourth of one percent
multiplied by the product of the stated redemption price at maturity of such Certificate and the
number of complete years to the first optional redemption date for such Certificate, and (iv) no
Certificate subject to optional redemption bears interest at a rate that increases during the term of
the Certificate.
The Certificates are subject to mandatory redemption. The yield on the Certificates is
calculated by treating the outstanding stated principal amounts payable on the mandatory
redemption dates as payments on such dates because the stated redemption price at maturity of
the Certificates does not exceed the issue price of the Certificates by more than one-fourth of one
percent multiplied by the product of the stated redemption price at maturity and the number of
years to the date of the weighted average maturity (determined by taking into account the
mandatory redemption schedule) of the Certificates.
The yield on the Certificates, calculated in this manner and based on an amount equal to
$1,750,000.00, which represents the Issue Price of the Certificates as set forth in the Certificate
of Purchaser attached as Exhibit A, is 4.39351035 percent.
B-1
DAL:672045.1
3. The Financial Advisor Calculated the weighted average maturity of the Certificates to
be 12.049 years, which is the sum of the products of the Issue Price of each group of identical
Certificates and the number of years to maturity (determined separately for each group of
identical Certificates and taking into account mandatory redemptions), divided by the aggregate
sale proceeds of the Certificates.
4. With respect to the issuance of the Certificates, the representations
paragraph 24 of the Federal Tax Certificate are, to the best of our knowledge, true,
complete.
[SIGNATURE PAGE FOLLOWS]
set forth in
correct and
B-2
DAL:672045.1
The Financial Advisor hereby authorizes the City to rely on the statements made herein in
connection with making the representations set forth in the Federal Tax Certificate to which this
- — Certificate is attached and in connection with compliance by the City with the provisions of the
Code regarding the exclusion from gross income of the interest on the Certificates. Further, we
hereby authorize Andrews Kurth LLP, Bond Counsel to the City to rely on the statements made
herein in connection with its opinion that interest on the Certificates is excludable from gross
income for federal income tax purposes.
EXECUTED and DELIVERED as of and on July 3, 2007.
GOVERNMENT CAPITAL SECURITIES
CORPORATION
By:
Name
Title:
B-3
DAL:672045.1
8038-6
Information Return for Tax -Exempt Governmental
Obligations
Form
► Under Internal Revenue Code section 149(e)
OMB No. 1545.0720
(Rev.
November 2000)
► See separate Instructions.
Departrnent or the Treasury
Caution: I( the Issue price is under $100,000, use Form 8038-GC.
Intemal
Revenue Service
•
Reporting
Authority
If Amended Return, check here ► ❑
1
Issuer's name
2 Issuer's employer identification number
City of Sanger, Texas
3
Number and street (or P.O. box if mail is not delivered to street address)
Room/suite
4 Report number
201 Bolivar Street
3 01
5
City, town, or post office, state, and ZIP code
Sanger, Texas 76266
6 Date of issue
'OF
7
Name of Issue
8 CUSIP number
Combination Tax and Revenue -Certificgtes
9
Name and title of officer or legal representative whom the IRS may call for more information
10 Telephone number of officer or legal representative
Bob C. Griffo, Bond Counsel
(214 ) 6594651
• Type of Issue (check applicable box es) and enter the Issue tree) see Instructions ana anacn schedule
11 ❑ Education . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 ❑ Health and hospital 12
13 ❑ Transportation a 13
14 ❑ Public safety. , . , , , , . . . . . , . . 14
15 ❑ Environment (including sewage bonds) . , . . , . . . , , 15
16 ❑ Housing , a 0 , . . , , , , , , , , , , , , , , , , , , a 16
17 ® Utilities . . . . a 0 17
18 ❑ Other. Describe ► 16
19 If obligations are TANS or RANs, check box ► ❑ If obligations are BANS, check box ► ❑
20 If obligations are in the form of a lease or installment sale, check box . . . , , ► ❑
AM
•
Descri tion of Obligations. Complete for the entire issue for which this form is bein
filed.
(a) Final maturity date
(b) Issue price
(c) Statedredemption
P Y
average ightedirrit
9 Y
(a) Yield
21
8/1/2027
$ 1.$
1 nnn
1 12.049 years 1
4J935,1.
%
P7sn
Uses of Proceeds of Bond Issue(including underwriters'
discount
12.
23
24
25
26
27
28
29
30
Proceeds used for accrued interest
Issue price of entire issue (enter amount from line 21, column (b)) .
Proceeds used for bond issuance costs (including underwriters' discount) 24 29 850
Proceeds used for credit enhancement . , . , , , . , , 25 -
Proceeds allocated to reasonably required reserve or replacement fund 26 -
Proceeds used to currently refund prior issues 27 -0-
Proceeds used to advance refund prior issues 28 "0"
Total (add lines 24 through 28) , 0 0 0 0 9 a 4 9 0 11
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here). I a
22
-0-
23
1,7509000
29
-
29 85
30
1,720,150
•
Description of Refunded Bonds (Complete this part only
for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded .. . ► years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded , ► years
33 Enter the last date on which the refunded bonds will be called. ►
34 Enter the date(s) the refunded bonds were issued ►
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35 _0_
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a ,_•„_. -n-
b Enter the final maturity date of the guaranteed investment contract ►
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a -0-
b if this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the name of the
issuer ► and the date of the issue ►
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ►
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ► ❑
40 If the issuer has identified a hedge, check box IN 9 a ► ❑
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.
Sign
Here
Date
For Paperwork Reduction Act Notice, see page 2 of the instructions.
s
_,�e �tgS, 111far�
Type or print na and title
Cat, No. 63773S Form 8038-G (Rev. 11-2000)
600 Travis, Suite 4200
Houston, Texas 77002
713.220.4200 Phone
713.220.4285 Fax
andrewskurth.com
July 35 2007
WE HAVE ACTED as Bond Counsel for the City of Sanger, Texas (the ty"), in
connection with an issue of certificates of obligation (the "Certificates") described as follows:
CITY OF SANGER, TEXAS COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2007, dated June 15, 2007, in the
aggregate principal amount of $1,750,000, maturing on August 1, 2027. The
Certificates are issuable in fully registered form only, in denomination of
$1,750,000, bear interest and may be transferred and exchanged as set out in the
Certificates and in the ordinance (the "Ordinance") adopted by the City Council
of the City authorizing their issuance.
WE HAVE ACTED as Bond Counsel for the sole purpose of rendering an opinion with
respect to the legality and validity of the Certificates under the Constitution and laws of the State
of Texas and with respect to the exclusion of interest on the Certificates from gross income under
federal income tax law. In such capacity we have examined the Constitution and laws of the
State of Texas; federal income tax law; and a transcript of certain certified proceedings
pertaining to the issuance of the Certificates, as described in the Ordinance. The transcript
contains certified copies of certain proceedings of the City; certain certifications and
representations and other material facts within the knowledge and control of the City, upon
which we rely; and certain other customary documents and instruments authorizing and relating
to the issuance of the Certificates. We have also examined executed Certificate No. R4 of this
issue.
WE HAVE NOT BEEN REQUESTED to examine, and have not investigated or verified,
any original proceedings, records, data or other material, but have relied upon the transcript of
certified proceedings. We have not assumed any responsibility with respect to the financial
condition or capabilities of the City or the disclosure thereof in connection with the sale of the
Certificates.
BASED ON SUCH EXAMINATION, it is our opinion as follows:
(1) The transcript of certified proceedings evidences complete legal
authority for the issuance of the Certificates in full compliance with the
Constitution and laws of the State of Texas presently in effect; the Certificates
constitute valid and legally binding obligations of the City enforceable in
accordance with the terms and conditions thereof, except to the extent that the
rights and remedies of the owners of the Certificates may be limited by laws
heretofore or hereafter enacted relating to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors of political
subdivisions and the exercise of judicial discretion in appropriate cases; and the
Certificates have been authorized and delivered in accordance with law; and
HOU:2707585.1
A�if�tl4� Bei}�fl�s DaIIaHSoustR�buston �O1Ld4fldon ItR�sA��les f���'G��k ThT��i������s Wa�I�Tsr%��%' B�
July 39 2007
Page 2
(2) The Certificates are payable, both as to principal and interest, from,
and secured by, the proceeds of a continuing, direct annual ad valorem tax, levied
within the limits prescribed by law, against taxable property within the City,
which taxes have been pledged irrevocably to pay the principal of and interest on
the Certificates; and
(3) The Certificates are further secured by a limited and subordinate
pledge of the net revenues of the water and sewer system of the City.
The revenues to be derived from the operation of the City's water and sewer system after
the payment of all operation and maintenance expenses thereof (the "Net Revenues"), in an
amount not to exceed $1,000, are pledged to the payment of the principal of and interest on the
Certificates, to the extent that ad valorem taxes may ever be insufficient or unavailable for said
purpose; provided, however, that such pledge is junior and subordinate in all respects to the
pledge of Net Revenues to the payment of any obligation of the City, whether authorized
heretofore or hereafter, which the City designates as having a pledge senior to the pledge of Net
Revenues to the payment of the Certificates.
The City has reserved the right to issue, for any lawful purpose at any time, in one or
more installments, bonds, certificates of obligation and other obligations of any kind secured by
a pledge of the Net Revenues that may be prior and superior in right to, on a parity with, or
junior and subordinate to the pledge of Net Revenues securing the Certificates.
ALSO BASED ON OUR EXAMINATION AS DESCRIBED ABOVE, it is our further
opinion that, subject to the restrictions hereinafter described, interest on the Certificates is
excludable from gross income of the owners thereof for federal income tax purposes under
existing law and is not subject to the alternative minimum tax on individuals or, except as
hereinafter described, corporations. The opinion set forth in the first sentence of this paragraph
is subject to the condition that the City comply with all requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the
Certificates in order that interest thereon be, or continue to be, excluded from gross income for
federal income tax purposes. The City has covenanted in the Ordinance to comply with each
such requirement. Failure to comply with certain of such requirements may cause the inclusion
of interest on the Certificates in gross income for federal income tax purposes to be retroactive to
the date of issuance of the Certificates. The Code and the existing regulations, rulings and court
decisions thereunder, upon which the foregoing opinions of Bond Counsel are based, are subject
to change, which could prospectively or retroactively result in the inclusion of the interest on the
Certificates in gross income of the owners thereof for federal income tax purposes.
INTEREST ON all tax-exempt obligations, including the Certificates, owned by a
corporation (other than an S corporation, a regulated investment company, areal estate
investment trust (REIT), a real estate mortgage investment conduit (REMIC) or a financial asset
securitization investment trust (FASIT)) will be included in such corporation's adjusted current
earnings for purposes of calculating such corporation's alternative minimum taxable income. A
HOU2707585.1
July 35 LUU /
Page 3
corporation's alternative minimum taxable income is the basis on which the alternative minimum
tax imposed by the Code is computed.
EXCEPT AS DESCRIBED ABOVE, we express no opinion as to any federal, state or
local tax consequences under present law, or future legislation, resulting from the ownership of,
receipt or accrual of interest on, or the acquisition or disposition of, the Certificates. Prospective
purchasers of the Certificates should be aware that the ownership of tax-exempt obligations, such
as the Certificates, may result in collateral federal income tax consequences to, among others,
Financial institutions, life insurance companies, property and casualty insurance companies,
certain foreign corporations doing business in the United States, certain S corporations with
Subchapter C earnings and profits, individual recipients of Social Security or Railroad
Retirement benefits, taxpayers who are deemed to have incurred or continued indebtedness to
purchase or carry tax-exempt obligations, taxpayers owning an interest in a FASIT that holds
tax-exempt obligations and individuals otherwise qualified for the earned income tax credit. For
the foregoing reasons, prospective purchasers should consult their tax advisors as to the
consequences of investing in the Certificates.
HOU:2707585. I
ATTORNEY GENERAL Ol~ TEXAS
GREG ABBOTT
July 2, 2007
THIS IS TO CERTJFY that the City of Sanger, Texas (the "Issuer") has
submitted to me City of Sanger Texas, Combination Tax and Revenue Certificate
of Obligation, Series 2007 (the "Certificate") in the principal amount of $1,750,000
for approval. The Certificate is dated June 15, 2007, numbered R4, and was
authorized by an Ordinance of the Issuer passed on June 18, 2007 (the "Ordinance").
I have examined the law and such certified proceedings and other papers as I deem
necessary to render this opinion.
As to questions of fact material to my opinion, I have relied upon representations of the
Issuer contained in the certified proceedings and other certifications of public officials furnished to
me without undertalcing to verify the same by independent investigation.
I express no opinion relating to the aflicial statement or any other of%ring material relating
to the Certificate.
Based on my examination, I am of the opinion, as of the date hereof and under existing law,
as follows (capitalized terms, except as herein defined, have the meanings given to them in the
Ordinance):
(1) The Certificate has been issued in accordance with law and is a valid and binding
obligation of the Issuer.
(2) The Certificate 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 and is
further payable from a pledge of the Net Revenues, in an amount not to exceed
$1,000, provided that the pledge of Net Revenues is and shall be junior and
subordinate in all respects to the pledge of Net Revenues to the payment of any
obligation of the Issuer, whether authorized heretofore or hereafter, which the Issuer
designates as having a pledge senior to the pledge of the Net Revenues to the
payment of the Certificate.
Therefore, the Certificate is approved.
No.46511
BookNa. 2007C
MAA
POST OFf10E BO.X 12548,
AUS TIN, TExns 78711-2548
rrL:(512)463-2100
WWW.OAG.STATE. TX. US
Au
Equn! Employment OpporrNnity
Employer •
printed a�
Reoyclyd Pnper
OFFICE OF COMPTROLLER
OF THE STATE OF TEXAS
I, Melissa Mora, Bond Clerk Assistant Bond Clerk in the office of the Comptroller of the
State of Texas, do hereby certify that, acting under the direction and authority of the Comptroller on
the 2nd day of July. 2007, 1 signed the name of the Comptroller to the certificate of registration
endorsed upon the:
Citxof Sanger, Te�cas, Combination Tax and Revenue Certificate of Obligation, Series 2007,
numbered R-1 dated
following signature:
IN WITNESS
and that in signing the certificate of registration I used the
EOF i have executed
this the 2nd day of July, 2007.
I, Susan Combs, Comptroller of Public Accounts of the State of Texas, certi#y that the person
who has signed the above certificate was duly designated and appointed by me under authority
vested in me by Chapter 403, Subchapter H, Government Code, with authority to sign my name to
all certificates of registration, and/or cancellation of bonds required by law to be registered and/or
cancelled by me, and was acting as such on the date first mentioned In this certificate, and that the
bonds/certificates described in this certificate have been duly registered in the office of the
Comptroller, under Registration Number 72995.
GIVEN under my hand and seal of office at Austin, Texas, this the 2nd day of July. 2007.
SUSAN COMBS
Comptroller of Public Accounts
of the State of Texas
OFFICE OF COMPTROLLER
OF THE STATE OF TEXAS
I, SUSAN COMBS, Comptroller of Public Accounts of the State of Texas,
do hereby certify that the attachment is a true and correct copy of the opinion of
the At#orney General approving the:
City of Sanger Texas Combination Tax and Revenue Certificate of Obligation.
Series 2007
numbered R-1. of the denomination of $ 1.750A00, dated June 15. 2007, as
authorized by issuer, interest 4a4 percent, under and by authority of which said
bonds/certificates were registered electronically in the office of the Comptroller,
on the 2nd day of July. 2007, under Registration Number 72995.
Given under my hand and seal of ofifice, at Aus#in, Texas, the 2nd day of
July. 2007. .
SUSAN COMBS
Comptroller of Public Accounts
of the State of Texas
$I,750,000
CITY OF BANGER, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION
F. _ � 1 _ 11
PURCHASER'S RECEIPT
July 3, 2007
I, the undersigned, a duly authorized representative of Bank of America, N.A., hereby
acknowledge receipt from the City of the Initial Certificate of its $1,750,000 Combination Tax
and Revenue Certificates of Obligation, Series 2007, dated June 15, 2007, which have been
delivered to the undersigned in proper form on the date hereof.,
By:_
Name:
Title:
.A.
Rtff�ert Doss
Vice President
HOU:2702233.1
$1,750,000
CITY OF SANGER, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION
SERIES 2007
PURCHASER'S RECEIPT
July 3, 2007
I, the undersigned, a duly authorized representative of Bank of America, N.A., hereby
acknowledge receipt from the City of the Initial Certificate of its $1,750,000 Combination Tax
and Revenue Certificates of Obligation, Series 2007, dated June 15, 2007, which have been
delivered to the undersigned in proper form on the date hereof.
IC � •
By:_
Name:
Title:
.A.
pert Doss
ce President
HOU:2702233.1
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SANGER, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION
SERIES 2007
NUMBER DENOMINATION
R-1 $1,7502000
REGISTERED REGISTERED
INTEREST RATE: DATED DATE; DELIVERY DATE:
4.40% June 15, 2007 July 3, 2007
REGISTERED OWNER: BANK OF AMERICA, N.A.
PRINCIPAL AMOUNT: ONE MILLION SEVEN HUNDRED FIFTY THOUSAND AND
N0/100 DOLLARS ($1,750,000)
THE CITY OF SANGER, TEXAS, a municipal corporation of the State of Texas (the
"City"), for value received, hereby promises to pay to the Registered Owner identified above or
its registered assigns, upon presentation and surrender of this Certificate at the principal
corporate trust office of Bank of America, N.A., Dallas, Texas, or its successor (the "Paying
Agent/Registrae), the principal amount identified above (or so much thereof as shall not have
been paid or deemed to have been paid upon prior redemption) payable in any coin or currency
A the United States of America which on the date of payment of such principal is legal tender
for the payment of debts due to the United States of America, and to pay interest thereon at the
rate shown above, calculated on a basis of a 360-day year composed of twelve 30-day months,
from the Delivery Date identified above. Interest on this Certificate is payable on August 1,
2008, and each February 1 and August 1 thereafter until maturity or earlier redemption of this
Certificate, 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 fifteenth 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 or earlier redemption shall be paid upon presentation and surrender of this Certificate at
the principal corporate trust office of the Paying Agent/Registrar. The unpaid principal of this
Certificate shall mature and shall be payable in installments on August 1 in the years and in the
amounts set forth in the table below:
Payment Date Principal Amount Payment Date Principal Amount
2008 $ 50,000 2018 85,000
2009 %000 2019 90,000
2010 6%000 2020 95,000
2011 65,000 2021 1002000
2012 65,000 2022 105,000
2013 70,000 2023 11%000
2014 75,000 2024 11 %000
HOU:2700304.2
2015 75,000 2025 115,000
2016 809000 2026 125,000
2017 859000 2027 13000
THIS CERTIFICATE REPRESENTS A DULY AUTHORIZED SERIES OF
CERTIFICATES (the "Certificates") in the aggregate principal amount of $1,750,000 issued
pursuant to an ordinance adopted by the City Council of the City on June 18, 2007 (the
"Ordinance") for the purpose of providing all or part of the funds to pay contractual obligations
to be incurred for the construction of public works and the purchase of materials, supplies,
equipment, machinery, buildings, land and rights -of -way for authorized needs and purposes and
for the payment of contractual obligations for professional services, to wit (1) to acquire and
renovate a building and parking area to be used by the City's public works departments (2) to
purchase phone, alarm and computer equipment and office furniture for such building, and (3)
professional services rendered in connection with the above listed projects.
THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to
any benefit under the Ordinance unless this Certificate 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.
ON ANY DATE, the principal installments of this Certificate may be redeemed prior to
their scheduled maturities, at the option of the City, with funds derived from any available and
lawful source, as a whole, or in part, and, if in part, the particular principal installments or
portions thereof, to be redeemed shall be selected and designated by the City, at a redemption
price equal to the principal amount to be redeemed plus accrued interest to the date fixed for
redemption, plus the "Make -Whole Amount". The Make -Whole Amount shall be equal to the
greater of (i) zero, or (ii) the Mark -to -Market adjustment, The City shall determine the principal
amount and the principal installments of this Certificate to be redeemed and shall provide the
Registered Owner with at least three Business Days written notice in advance of the date of
redemption.
For the purposes of the above, the following definitions shall apply:
1. Mark -to -Market Adjustment: The amount, calculated on any prepayment date, which
is derived by subtracting: (i) the principal amount of this Certificate to be prepaid as of
such prepayment date, from (ii) the Mark -to -Market Value of this Certificate to be
prepaid on such prepayment date.
2. Mark -to -Market Value: The amount, calculated on any prepayment date, which is
derived by surnrning the present values of each prospective payment of principal and
interest which without such full or partial prepayment, could otherwise have been
received by the Purchaser over the remaining contractual life of this Certificate if the
Purchaser had instead invested the proceeds of this Certificate on the issuance date at the
Initial Blended Money Market Funds Rate. The individual discount rate used to evaluate
each prospective payment of interest and/or principal shall be the Current Blended
HOU:2700309.1
_ Money Market Funds Rate for the maturity matching that of each specific payment of
principal and/or interest.
3. Initial Blended Money Market Funds Rate: That borrowing rate, calculated on the
issuance date and including costs incurred by the Purchaser or FDIC insurance, reserve
requirements, and other such explicit or implicit cost levied upon the Purchaser by any
regulatory agency, which would be attainable by the Purchaser if it borrowed funds with
an interest payment frequency and principal repayment schedule matching that of this
Certificate. Such funds would be borrowed in one or more wholesale funding markets
available to the Purchaser, including negotiable certificates of deposits, federal funds and
others. The City acknowledges that the Purchaser may not actually purchase this
Certificate with any such specific matched set or mix of instruments, and that the Initial
Blended Money Market Funds Rate is the Purchaser's reasonable estimate only.
4. Current Blended Money Market Funds Rafie: That rate, calculated on the prepayment
date and including cost incurred by the Purchaser for FDIC insurance, reserve requirements, and
other such explicit or implicit cost levied upon the Purchaser by any regulatory agency, which
would be attainable by the Purchaser if it borrowed funds in a maturity matching a specific
prospective Certificate payment date. Such funds would be borrowed in one or more wholesale
funding markets available to the Purchaser, including negotiable certificates of deposit, federal
funds, or others. A separate Current Blended Money Market Funds Rate will be calculated for
each prospective interest and/or principal payment date. City acknowledges that the Current
Blended Money Market Funds Rate is the Purchaser's reasonable estimate only, and that the
Purchaser is under no obligation actually to purchase or match funds for any transaction.
CERTIFICATES MAY BE REDEEMED IN PART only in integral multiples of $5,000.
If a Certificate subject to redemption is in a denomination larger than $5,000, a portion of such
Certificate may be redeemed, but only in integral multiples of $5,000. In selecting portions of
Certificates for redemption, each Certificate shall be treated as representing that number of
Certificates of $5,000 denomination which is obtained by dividing the principal amount of such
Certificate by $5,000. Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with the provisions of the Ordinance, shall authenticate and
deliver in exchange therefor a Certificate or Certificates of like maturity and interest rate in an
aggregate principal amount equal to the unredeemed portion of this Certificate so surrendered.
NOTICE OF ANY SUCH REDEMPTION, identifying the Certificates or portions
thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the
Registered Owners thereof at their addresses as shown on the books of registration kept by the
Paying Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption.
By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar
for the payment of the redemption price of the Certificates called for redemption. If such notice
of redemption is given, and if due provision for such payment is made, all as provided above, the
Certificates which are to be so redeemed thereby automatically shall be redeemed prior to their
scheduled maturities, they shall not bear interest after the date fixed for redemption, and they
shall not be regarded as being outstanding except for the purpose of being paid with the funds so
provided for such payment.
HOU:2700309.1
THIS CERTIFICATE IS TRANSFERABLE only upon presentation and surrender at the
principal 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 CERTIFICATE IS EXCHANGEABLE at the principal corporate trust office of the
Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and
in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and
conditions of the Ordinance.
THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange
any Certificate called for redemption, in whole or in part, during the forty-five (45) day period
immediately prior to the date fixed for redemption; provided, however, that such limitation shall
not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a
Certificate called for redemption in part.
THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of
any Certificate 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 Certificate. 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 Certificate 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 Certificate 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 Certificate
have been performed, exist and have been done in accordance with law; that the Certificates do
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 Certificate, 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.
IT IS FURTHER DECLARED AND REPRESENTED that the revenues to be derived
from the City's water and sewer system, after the payment of all operation and maintenance
expenses thereof (the "Net Revenues"), in an amount not to exceed $1,000, are pledged to the
payment of the principal of and interest on the Certificates, provided that the pledge of Net
Revenues is and shall be junior and subordinate in all respects to the pledge of Net Revenues to
the payment of any obligation of the City, whether authorized heretofore or hereafter, which the
City designates as having a pledge senior to the pledge of the Net Revenues to the payment of
the Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in
one or more installments,. bonds, certificates of obligation and other obligations of any kind,
secured in whole or in part by a pledge of Net Revenues, that may be prior and superior in right
to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing the
Certificates.
HOU:2700309. i
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 Certificates assent by acceptance of the Certificates.
HOtJ:2700309.1
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or
placed in facsimile hereon and this Certificate to be signed by the Mayor, countersigned by the
City Secretary by their manual, lithographed or printed facsimile signatures.
CITY OF BANGER, TEXAS
COUNTERSIGNED:
c.:zry �ecreiary
s
HOU:2700304.2
COMPTROLLER'S REGISTRATION CERTIFICATE
THE STATE OF TEXAS =ri E
REGISTER NO. j .�i ,� b
OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS
I hereby certify that this certificate has been examined, certified as to validity and
approved by the Attomey 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
2007.
Cornpt�oller of Public Accounts
of the State of Texas
[SEAL]
HOU:2700309.1
` 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 bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer such bond on the books
kept for registration thereof, with full power of substitution in the premises.
DATED;
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the Registered
Owner as shown on the face of this bond in
NOTICE: Signature must be guaranteed by a every particular, without any alteration,
member firm of the New York Stock Exchange enlargement or change whatsoever,
or a commercial bank or trust company.
H4U:2700309,2
CITY OF SANGER, TEXAS
$1,750,000
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION
SERIES 2007
The following information is included in the transcript submitted to the Office of the
Attorney General for the purpose of obtaining Attorney General approval of the issuance of the
referenced bonds, as required by H.B. 1564, 74th Legislature, Regular Session (Tex. Laws 1995,
ch. 383, at 2930).
A. An additional copy of the Final Official Statement and the following information, if not
included in the Final Official Statement or such statement has not been prepared.
1. Name of bond issue: City of Sanger, Texas Combination Tax and Revenue
Certificates of Obligation, Series 2007
2. a) par amount of issue: $1,750,000
b) dollar amount of bond premium, if any: N/A
c) dollar amount of bond original issue discount, if any: N/A
3. Dated date: June 15, 2007
4. Closing date (expected delivery date, on or about): July 3, 2007
5. By year, maturity amounts, coupon rates, prices or yields: See Attached.
(If no reoffering yield (NRO) indicated, please provide yield separately.)
6. Call provisions, including premiums, if any: see attached
7. Mandatory redemption provisions: N/A
8. Debt -service schedule, principal and interest, and annual totals, with fiscal year
identified: See Attached.
9. Use of derivative products associated with financing: N/A
10. If applicable, schedule of bonds refunded, including, by year, principal amount,
coupon, and interest cost: N/A
11. Pledge: tax (ad valorem, sales, other), revenue, combination: Ad valorem tax
12. Type of credit enhancement (including PSF guarantee): N/A
13. Rating services) and ratings) assigned to issue: N/A
B. Additional Information
1. Type of sale: Competitive
2. Pricing:
Negotiated sale: June 18, 2007
Competitive sale: N/A
3. If purchaser of bonds is a governmental entity, such as the Texas Water
Development Board, please name purchaser: N/A
4. If a refunding bond issue, please provide final schedule of cash and present value
savings (loss): N/A
5. If a school district refunding bond issue, and the refunding involves "old debt" per
the Texas Education Code, please provide schedule of principal and interest
payments of refunding bonds associated with "old debt": N/A
HOU:2700314.2
If the same issue also involves "new debt," please provide a schedule of principal
and interest payments on the "new debt" portion as well. These two schedules
together should equal total debt service by maturity: All of the refunded bonds
represent (and accordingly all of the refunding bonds are associated with) "new
debt." N/A
6. CAB's and CIB's —please provide the per annum bond interest rates by maturity
as shown in the bond order document: N/A
7. Costs of Issuance —please provide best estimate of costs.
If final costs are significantly different, please submit changes directly to the
Texas Bond Review Board. Call (512) 463-1741 or (512) 475-4802 (FAX).
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(a) relates to the ongoing tees or recurring costs of a financing for services such as paying
agent, remarketing agent, credit provider and other similar services (may be expressed as
a formula as appropriate)
(b) e.g., bond counsel, financial advisor, paying agent, printing, AG approval
(c) e.g., remarketing fees, escrow verification fees, etc.
(d) the cost for marketing and selling the bonds, including takedown, structuring fee,
underwriting risk and expenses.
PERSON COMPLETING FORM:
Telephone No.
(713) 220-3879
Name: Hoang T. Vu Fax No. (713)
238-7129
HOU:2700314.2
Redemption Provision
On any date, the principal installments of the Certificates may be redeemed prior to their
scheduled maturities, at the option of the City, with funds derived from any available and lawful
source, as a whole, or in part, and, if in part, the particular principal installments or portions
thereof, to be redeemed shall be selected and designated by the City, at a redemption price equal
to the principal amount to be redeemed plus accrued interest to the date fixed for redemption,
plus the "Make -Whole Amount". The Make -Whole Amount shall be equal to the greater of
(i) zero, or (n) the Mark -to -Market adjustment. The City shall determine the principal amount
and the principal installments of the Certificate to be redeemed and shall provide the Registered
Owner with at least three Business Days written notice in advance of the date of redemption.
For the purposes of the above, the following definitions shall apply:
1. Mark -to -Market Adjustment: The amount, calculated on any prepayment date, which
is derived by subtracting: (i) the principal amount of the Certificate to be prepaid as of
such prepayment date, from (ii) the Mark -to -Market Value of the Certificate to be prepaid
on such prepayment date.
2. Mark -to -Market Value: The amount, calculated on any prepayment date, which is
derived by summing the present values of each prospective payment of principal and
interest which without such full or partial prepayment, could otherwise have been
received by the Purchaser over the remaining contractual life of the Certificate if the
Purchaser had instead invested the proceeds of the Certificate on the issuance date at the
Initial Blended Money Market Funds Rate. The individual discount rate used to evaluate
each prospective payment of interest and/or principal shall be the Current Blended
Money Market Funds Rate for the maturity matching that of each specific payment of
principal and/or interest.
3. Initial Blended Money Market Funds Rate: That borrowing rate, calculated on the
issuance date and including costs incurred by the Purchaser or FDIC insurance, reserve
requirements, and other such explicit or implicit cost levied upon the Purchaser by any
regulatory agency, which would be attainable by the Purchaser if it borrowed funds with
an interest payment frequency and principal repayment schedule matching that of the
Certificate. Such funds would be borrowed in one or more wholesale funding markets
available to the Purchaser, including negotiable certificates of deposits, federal funds and
others. The City acknowledges that the Purchaser may not actually purchase the
Certificate with any such specific matched set or mix of instruments, and that the Initial
Blended Money Market Funds Rate is the Purchaser's reasonable estimate only.
4. Current Blended Money Market Funds Rate: That rate, calculated on the prepayment date
and including cost incurred by the Purchaser for FDIC insurance, reserve requirements, and other
such explicit or implicit cost levied upon the Purchaser by any regulatory agency, which would
be attainable by the Purchaser if it borrowed funds in a maturity matching a specific prospective
Certificate payment date. Such funds would be borrowed in one or more wholesale funding
markets available to the Purchaser, including negotiable certificates of deposit, federal funds, or
3
HOU:2700314.2
others. A separate Current Blended Money Market Funds Rate will be calculated for each
prospective interest and/or principal payment date. City acknowledges that the Current Blended
Money Market Funds Rate is the Purchaser's reasonable estimate only, and that the Purchaser is
under no obligation actually to purchase or match funds for any transaction.
HOU:2700314.2