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$4,365,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
Bonds Delivered: February 15, 2007
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Transcript of Proceedings
LAW OFFICES
MCCALL, PARKHURST & NORTON L.L.P.
700 N. ST. MARY'S STREET, SUITE 1525
SAN ANTONIO, TEXAS 78205
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$4,365,000
„w, CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007
""' TABLE OF CONTENTS
wrr PRIMARY FINANCING DOCUMENTS AND AGREEMENTS
Bond Ordinance ............................................................ 1
~ Investment Letter ........................................................... 2
Paying Agent/Registrar Agreement ............................................. 3
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Specimen Bond ............................................................ 4
DOCUMENTS RELATED TO TAX EXEMPTION
'~` Federal Tax Certificate ....................................................... 5
Form 8038-G .............................................................. 6
CERTIFICATES
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General Certificate .......................................................... 7
Signature Identification and No-Litigation Certificate .............................. 8
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Certificate of The Bank of New York Trust Company, National Association
re: Notice of Redemption and Paying Agency Fees ................................ 9
Certificate of Sufficiency ..................................................... 10
MISCELLANEOUS DOCUMENTS
Instruction Letters to Attorney General and Comptroller of Public Accounts ............. 11
Closing Memorandum ....................................................... 12
~, Receipt for Bond Proceeds .................................................... 13
Material Events Filing ....................................................... 14
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OPINIONS
Attorney General's Opinion with Comptroller's Registration Certificate ................ 15
Opinion of Bond Counsel .................................................... 16
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'~" THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE
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CERTIFICATE FOR ORDINANCE
I, the undersigned City Secretary of the City of Kennedale, Texas (the "City"), hereby certify
as follows:
1. The City Council of the City convened in REGULAR MEETING ON THE 11 `h DAY OF
JANUARY, 2007 at the City Hall, and the roll was called of the duly constituted officers and
members of said City Council, to wit:
,,,,,, Bryan Lankhorst, Mayor Brian Johnson, Councilmember, Place 3
John Clark, Councilmember, Place 1 Ronnie Nowell, Councilmember, Place 4
David Green, Councilmember, Place 2 George Barrett, Councilmember, Place 5
and all of said officers and members of said City Council were present, except the following
absentees: None .Whereupon, among other business, the
following was transacted at said Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF
~" "CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING
BONDS, SERIES 2007"; SECURING THE PAYMENT THEREOF BY
AUTHORIZING THE LEVY OF AN ANNUAL AD VALOREM TAX;
'~"' APPROVING AND AUTHORIZING THE EXECUTION OF ALL
INSTRUMENTS AND PROCEDURES RELATED THERETO INCLUDING
AN INVESTMENT LETTER AND A PAYING AGENT/REGISTRAR
""` AGREEMENT; AND PROVIDING FOR AN IMMEDIATE EFFECTIVE
DATE
~` was duly introduced for the consideration of said City Council. It was then duly moved and
seconded that said Ordinance be passed and, after due discussion, said motion carrying with it the
,~ adoption of said Ordinance, prevailed and carried by the following vote:
AYES: 5 NOES: 0 ABSTENTIONS: 0
2. A true, full and correct copy of the aforesaid Ordinance adopted at the Meeting described
in the above and foregoing paragraph is attached to and follows this Certificate; the Ordinance has
,,., been duly recorded in said City Council's minutes of said Meeting; the above and foregoing
paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting
pertaining to the passage of said Ordinance; the persons named in the above and foregoing paragraph
~• are the duly chosen, qualified and acting officers and members of said City Council as indicated
therein; each of the officers and members of said City Council was duly and sufficiently notified
officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and
that said Ordinance would be introduced and considered for passage at said Meeting, and each of
said officers and members consented, in advance, to the holding of said Meeting for such purpose,
and that said Meeting was open to the public and public notice of the time, place and purpose of said
""" meeting was given, all as required by Chapter 551, Texas Government Code.
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SIGNED AND SEALED THE 11 `'' DAY OF JANUARY, 2007.
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City Secretary
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ORDINANCE NO.
~ ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF
"CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING
BONDS, SERIES 2007"; SECURING THE PAYMENT THEREOF BY
AUTHORIZING THE LEVY OF AN ANNUAL AD VALOREM TAX;
APPROVING AND AUTHORIZING THE EXECUTION OF ALL
;,,,,~ INSTRUMENTS AND PROCEDURES RELATED THERETO INCLUDING
AN INVESTMENT LETTER AND A PAYING AGENT/REGISTRAR
AGREEMENT; AND PROVIDING FOR AN IMMEDIATE EFFECTIVE
9,, DATE
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SALE DATE: JANUARY 11, 2007
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TABLE OF CONTENTS
Section 1. AMOUNT AND PURPOSE OF THE BONDS ........................ 3
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Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND
MATURITIES OF THE BONDS ................................. 3
Section 3. INTEREST .................................................... 4
"""' Section 4. CHARACTERISTICS OF THE BONDS; APPROVAL OF PAY ING
AGENT/REGISTRAR AGREEMENT .............................. 4
(a) Registration, Transfer, and Exchange; Authentication ............... 4
'~`' (b) Payment of Bonds and Interest ................................. 5
(c) In General ................................ 5
.................
(d) Substitute Paying Agent/Registrar .............................. 6
(e) Delivery of Initial Bond ....................................... 6
Section 5. FORM OF BOND ....... 6
Section 6. INTEREST AND SINKING FUND; TAX LEVY ..................... 13
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Section 7. INVESTMENTS .............................. 13
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~„ Section 8. EMPOWERED .................................. 14
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Section 9. DEFEASANCE OF THE BONDS ................................. 14
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Section 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS ...................................................... 15
+.~ (a) Replacement Bonds .......................................... 15
(b) Application for Replacement Bonds ............................. 15
(c) No Default Occurred ......................................... 15
~ (d) Charge for Issuing Replacement Bonds .......................... 16
(e) Authority for Issuing Replacement Bonds ......................... 16
""`~ Section 11. CUSTODY, APPROVAL
AND REGISTRATION OF THE
,
BONDS; BOND COUNSEL'S OPINION, BOND INSURANCE,
AND CUSIP NUMBERS ....................................... 16
Section 12. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST
ON THE BONDS .............................. 16
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Section 13. NO RULE 15c2-12 UNDERTAKING .............................. 19
Section 14. SALE AND DELIVERY OF THE BONDS .......................... 19
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~,,, Section 15. PREPAYMENT FEE ............................................ 19
Section 16. APPROVAL OF REFUNDING OF REFUNDED OBLIGATIONS ........ 20
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Section 17. NOTICE OF REDEMPTION OF REFUNDED OBLIGATIONS ......... 20
Section 18. AUTHORITY FOR OFFICERS TO EXECUTE DOCUMENTS AND
APPROVE CHANGES ......................................... 20
'"~' Section 19. ORDINANCE A CONTRACT; AMENDMENTS ..................... 21
Section 20. SECURITY INTEREST ......................................... 21
Section 21. REMEDIES IN EVENT OF DEFAULT ............................. 22
~` Section 22. INTERESTED PARTIES ........................................ 22
Section 23. INCORPORATION OF RECITALS ................................ 22
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Section 24. SEVERABII.ITY ............................................... 22
Section 25. EFFECTIVE DATE ............................................. 22
,~„ SIGNATURES
Exhibit A PAYING AGENT/REGISTRAR AGREEMENT
Exhibit B FORM OF NOTICE OF REDEMPTION
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ORDINANCE N0.355
ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF
"CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING
"""" BONDS, SERIES 2007"; SECURING THE PAYMENT THEREOF BY
AUTHORIZING THE LEVY OF AN ANNUAL AD VALOREM TAX;
APPROVING AND AUTHORIZING THE EXECUTION OF ALL
~ INSTRUMENTS AND PROCEDURES RELATED THERETO INCLUDING
AN INVESTMENT LETTER AND A PAYING AGENT/REGISTRAR
AGREEMENT; AND PROVIDING FOR AN IMMEDIATE EFFECTIVE
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DATE
,~„ THE STATE OF TEXAS §
COUNTY OF TARRANT §
CITY OF KENNEDALE §
WHEREAS, the CITY OF KENNEDALE, TEXAS (the "City") in Tarrant County, Texas, is a
political subdivision of the State of Texas operating as ahome-rule municipality pursuant to the
~. Texas Local Government Code and its City Charter; and
WHEREAS, among other obligations of the City which are secured by the full faith and
~+ credit of the City and a pledge by the City to levy ad valorem taxes sufficient to pay principal of and
interest on such obligations as they become due, there are specifically outstanding the following
series of obligations:
City ofKennedale, Texas Combination Tax and Revenue Certificates of Obligation,
Series 1998, dated November 1, 1998, maturing on February 1 S in the years 2007
'~" through 2024, currently outstanding in the aggregate principal amount of
$4, 510, 000 (the "Series 1998 Certificates of Obligation'); and
"W WHEREAS, the City now desires to refund all of the outstanding Series 1998 Certificates
of Obligation maturing in the years 2008 through 2024, which obligations are referred to collectively
herein as the "Refunded Obligations" and are more specifically described as maturing in the years
~ and in the respective principal amounts (aggregating $4, 325, 000 in principal amount) and bearing
interest as shown in the following table:
The remainder of this page intentionally left blank)
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CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998
MATURITY
(FEBRUARY 1S)
PRINCIPAL AMOUNT
MATURING IN YEAR PRINCIPAL
AMOUNT BEING
REFUNDED STATED
INTEREST
RATE (%)
CUSIP No.
(489332)
2008 $190,000 $190,000 4.375 DVS
2009 200,000 200,000 4.375 DW3
2010 210,000 210,000 4.375 DX1
2011 225,000 225,000 4.375 DY9
2012 230,000 230,000 4.375 DZ6
2013 240,000 240,000 4.400 EAO
2014 250,000 250,000 4.450 EB8
2015 260,000 260,000 4.500 EC6
2016 275,000 275,000 4.550 ED4
2017 290,000 290,000 4.550 EE2
2018 305,000 305,000 4.600 EF9
2019 320,000 320,000 4.700 EG7
**** **** **** **** ****
2021 685,000 685,000 4.750 EJ1
**** **** **** **** ****
2024 645,000 645,000 4.800 EM4
Totals $4,325,000 $4,325,000 *** ***
WHEREAS, all of the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized; and
WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207"),
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authorizes the City to issue refunding bonds and to deposit the proceeds from the sale thereof, and
any other available funds or resources, directly with a place of payment (paying agent) for the
~,,, Refunded Obligations, or with another trust company or commercial bank that does not act as a
depository for the City, in an amount sufficient to provide for the payment and/or redemption of the
Refunded Obligations, and such deposit, if made before such payment dates, shall constitute the
„~ making of firm banking and financial arrangements for the discharge and final payment or
redemption of the Refunded Obligations; and
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WHEREAS, the Refunded Obligations are scheduled to be redeemed on a date earlier than
the next scheduled interest payment date on the Refunded Obligations, and thus, pursuant to Section
1207.062 of Chapter 1207, the City is not required to enter into an escrow agreement relating to the
redemption of the Refunded Obligations; however, shall instead deposit the proceeds from the bonds
""' authorized herein (defined in Section 2 hereof as the "Bonds"), and any other available funds or re-
sources, directly with The Bank of New York Trust Company, National Association, Dallas, Texas
(as successor to U.S. Trust Company of Texas, Dallas, Texas), the paying agent/registrar for the
"~` Refunded Obligations, in an amount sufficient to provide for the redemption of the Refunded
Obligations; and
WHEREAS, the City Council of the City hereby finds and declares a public purpose and
deems it advisable and in the best interests of the City to issue the Bonds to pay costs of issuance and
~, refund the Refunded Obligations in order to achieve a gross debt service savings of $236, 266.54 and
a present value debt service savings of $165,349.74 for the benefit of the taxpayers of the City; and
;~„ WHEREAS, the Bonds hereinafter authorized and designated are to be issued and delivered
pursuant to Chapter 1207, Texas Government Code; and
,~„ WHEREAS, it is hereby officially found and determined that the meeting at which this
Ordinance was passed was open to the public, and public notice of the time, place, and purpose of
said meeting was given, all as required by Chapter 551, Texas Government Code.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
KENNEDALE, TEXAS:
SECTION 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or bonds of the City
further described in Section 2(a) of this Ordinance and referred to herein as the "Bonds" are hereby
""' authorized to be issued and delivered in the aggregate principal amount of $4,365,000 FOR THE
PURPOSE OF REFUNDING THE CITY'S OUTSTANDING COMBINATION TAX AND
REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998 AND TO PAY COSTS OF
"~" ISSUANCE.
SECTION 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS AND
`~ MATURITIES OF THE BONDS. Each certificate of obligation issued pursuant to and for the
purpose described in Section 1(a) of this Ordinance shall be designated: CITY of KENNEDALE,
TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007, and initially there shall be issued,
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sold and delivered hereunder one fully registered certificate of obligation, without interest coupons,
dated February 1, 2007, in the aggregate principal amount of $4,365, 000, numbered T-1 (the "Initial
~, Bond'), with certificates of obligation issued in replacement thereof being in the denomination of
$5,000 or any integral multiple thereof and numbered consecutively from R-1 upward, all payable
to the initial registered owner thereof (with the Initial Bond being payable to the initial purchaser
~,,, designated in Section 14 hereof), or to the registered assignee or assignees of said certificates of
obligation or any portion or portions thereof (in each case, the "Registered Owner"), and the
certificates of obligation shall mature and be payable serially on February 1 S in each of the years
~•• and in the principal amounts, respectively, as set forth in the following schedule:
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YEAR OF
MATURITY PRINCIPAL
AMOUNT YEAR OF
MATURITY PRINCIPAL
AMOUNT YEAR OF
MATURITY PRINCIPAL
AMOUNT
2008 200,000 2014 260,000 2020 330,000
2009 210,000 2015 265,000 2021 345,000
2010 220,000 2016 280,000 2022 195,000
2011 235,000 2017 295,000 2023 205,000
2012 240,000 2018 305,000 2024 210,000
2013 250,000 2019 320,000 ****
The term "Bonds" as used in this Ordinance shall mean and include the Bonds initially issued
and delivered pursuant to this Ordinance and all substitute certificates of obligation exchanged
"~" therefor, as well as all other substitute certificates of obligation and replacement certificates of
obligation issued pursuant hereto, and the term "Bond" shall mean any of the Bonds.
"" SECTION 3. INTEREST. The Bonds shall bear interest calculated on the basis of a 360-day
year composed of twelve 30-day months from the dates specified in the FORM OF BOND set forth
in this Ordinance to their respective dates of maturity or prior redemption at a per annum rate of
~`" 3.970%. Said interest shall be payable in the manner provided and on the dates stated in the FORM
OF BOND set forth in this Ordinance.
SECTION 4. CHARACTERISTICS OF THE BONDS; APPROVAL OF PAYING
AGENT/REGI5TRARRGREEMENT. (a) Registration. Transfer, and Exchange; Authentication.
r. The City shall keep or cause to be kept at the designated corporate trust office ofBank ofAmerica,
N.A. (currently located in Fort Worth, Texas) (the "Paying Agent/Registrar") books or records for
the registration of the transfer and exchange of the Bonds (the "Registration Books"), and the City
,,., hereby appoints the Paying Agent/Registrar asits registrar and transfer agent to keep such books or
records and make such registrations of transfers and exchanges under such reasonable regulations
as the City and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make
such registrations, transfers and exchanges as herein provided. Attached hereto as Exhibit A is a copy
of the Paying Agent/Registrar Agreement between the City and the Paying Agent/Registrar which
is hereby approved in substantially final form, and the Mayor and City Secretary of the City are
•r• hereby authorized to execute the Paying Agent/Registrar Agreement and approve any changes in the
final form thereof.
The Paying Agent/Registrarsha1l obtain and record in the Registration Books the address of
the registered owner of each Bond to which payments with respect to the Bonds shall be mailed, as
herein provided; but it shall be the duty of each registered owner to notify the Paying Agent/Registrar
'"' in writing of the address to which payments shall be mailed, and such interest payments shall not be
mailed unless such notice has been given. To the extent possible and under reasonable
circumstances, all transfers of Bonds shall be made within three business days after request and
""~ presentation thereof. The City shall have the right to inspect the Registration Books during regular
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business hours of the Paying Agent/Registraz, but otherwise the Paying Agent/Registraz shall keep
"" the Registration Books confidential and, unless otherwise required by law, shall not permit their
inspection by any other entity. The Paying Agent/Registrar's standard or customary fees and charges
for making such registration, transfer, exchange and delivery of a substitute Bond or Bonds shall be
"`~ paid as provided in the FORM BOND set forth in this Ordinance. Registration of assignments,
transfers and exchanges of Bonds shall be made in the manner provided and with the effect stated
in the FORM OF BOND set forth in this Ordinance. Each substitute Bond shall bear a letter and/or
~. number to distinguish it from each other Bond.
Except as provided in (c) below, an authorized representative of the Paying Agent/Registraz
shall, before the delivery of any such Bond, date and manually sign the Paying Agent/Registraz's
Authentication Certificate, and no such Bond shall be deemed to be issued or outstanding unless
,,, such Certificate is so executed. The Paying Agent/Registraz promptly shall cancel all paid Bonds
and Bonds surrendered for transfer and exchange. No additional ordinances, orders, or resolutions
need be passed or adopted by the governing body of the City or any other body or person so as to
„~. accomplish the foregoing transfer and exchange of any Bond or portion thereof, and the Paying
AgentlRegistraz shall provide for the printing, execution, and delivery of the substitute Bonds in the
manner prescribed herein, and said Bonds shall be of type composition printed on paper with
.. lithographed or steel engraved borders of customary weight and strength. Pursuant to Chapter 1201,
Texas Government Code, and particulazly Subchapter D and Section 1201.067 thereof, the duty of
transfer and exchange of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registraz,
and, upon the execution of said Certificate, the transferred and exchanged Bond shall be valid,
incontestable, and enforceable in the same manner and with the same effect as the Bonds which
initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General,
"' and registered by the Comptroller of Public Accounts.
(b) Payment of Bonds and Interest. The City hereby further appoints the Paying
"" Agent/Registraz to act as the paying agent for paying the principal of and interest on the Bonds, all
as provided in this Ordinance. The Paying Agent/ Registraz shall keep proper records of all
payments made by the City and the Paying Agent/Registraz with respect to the Bonds.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the registered owners
thereof, (ii) maybe redeemed prior to their scheduled maturities (notice of which shall be given to
the Paying Agent/Registraz by the City at least 50 days prior to any such redemption date), (iii) may
.r be transferred and assigned, (iv) maybe exchanged for other Bonds, (v) shall have the chazacter-
istics, (vi) shall be signed, sealed, executed and authenticated, (vii) shall be payable as to principal
and interest, and (viii) shall be administered and the Paying Agent/Registraz and the City shall have
,~„ certain duties and responsibilities with respect to the Bonds, all as provided, and in the manner and
to the effect as required or indicated, in the FORM OF BOND set forth in this Ordinance. The Initial
Bond is not required to be, and shall not be, authenticated by the Paying Agent/Registraz, but on each
... substitute Bond issued in exchange for the Initial Bond issued under this Ordinance the Paying
Agent/Registraz shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION
CERTIFICATE, in the form set forth in the FORM OF BOND. In lieu of the executed Paying
•^ Agent/Registrar's Authentication Certificate described above, the Initial Bond delivered on the
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closing date (as further described in subparagraph (i) below) shall have attached thereto the
""r Comptroller's Registration Certificate substantially in the form set forth in the FORM OF BOND
below, manually executed by the Comptroller of Public Accounts of the State of Texas or by her duly
authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved
by the Attorney General of the State of Texas and that it is a valid and binding obligation of the City,
and has been registered by the Comptroller.
(d) Substitute Pavin~Agent/Re istrar. The City covenants with the registered owners of the
Bonds that at all times while the Bonds are outstanding the City will provide a competent and legally
,~„ qualified bank, trust company, financial institution, or other entity to act as and perform the services
of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar
will be one entity and shall be an entity registered with the Securities and Exchange Commission.
,,,,. The City reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not
less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days
prior to the next principal or interest payment date after such notice. In the event that the entity at
•• any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method)
should resign or otherwise cease to act as such, the City covenants that promptly it will appoint a
competent and legally qualified bank, trust company, financial institution, or other agency to act as
Paying Agent/Registrarunder this Ordinance. Upon any change in the Paying AgentlRegistrar, the
previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a
copy thereof), along with all other pertinent books and records relating to the Bonds, to the new
'~" Paying Agent/Registrar designated and appointed by the City. Upon any change in the Paying
Agent/Registrar, the City promptly will cause a written notice thereof to be sent by the new Paying
AgentlRegistrar to each registered owner of the Bonds, by United States mail, first-class postage
"" prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting
the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed
to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each
`~ Paying Agent/Registrar.
(e) Delivery oflnitial Bond. On the closing date, one Initial Bond representing the entire
principal amount of the respective series of Bonds, payable in stated installments to the initial
registered owner named in Section 14 of this Ordinance or its designee, executed by manual or
facsimile signature of the Mayor and City Secretary of the City, approved by the Attorney General
of Texas, and registered and manually signed by the Comptroller of Public Accounts of the State of
Texas, will be delivered to the initial purchaser or its designee. Upon payment for the Initial Bond,
„~, the Paying Agent/Registrar shall cancel the Initial Bond and deliver to the initial registered owner
or its designee one registered definitive Bond for each year of maturity of the Bonds, in the aggregate
principal amount of all of the Bonds for such maturity.
SECTION S. FORM OF BOND. The form of the Bonds, including the form of Paying
AgentlRegistrar's Authentication Certificate, the form of Assignment, and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas (to be attached only to the
Bonds initially issued and delivered pursuant to this Ordinance), shall be, respectively, substantially
as follows, with such appropriate variations, omissions, or insertions as are permitted or required by
""' this Ordinance.
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FORM OF BOND
R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
INTEREST RATE
3.970%
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DATE OF DELIVERY MATURITY DATE
February 15, 2007
DOLLARS
ON THE MATURITYDATE specified above, the CITY OF KENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ONthis Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying AgendRegistrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
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Paying AgentlRegistrar by United States mail, first-class postage prepaid, on each such interest
"" payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
of the month next preceding each such date (the "Record Date") on the Registration Books kept by
the Paying Agent/Registrar, as hereinafter described. In the event of anon-payment of interest on
r` a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment
(a "Special Record Date") will be established by the Paying Agent/Registrar ifand when funds for
the payment of such interest have been received from the City. Notice of the Special Record Date
and of the scheduled payment date of the past due interest (the "Special Payment Date" which shall
be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special
Record Date by United States mail, first class, postage prepaid, to the address of each Registered
Owner appearing on the Registration Books of the Paying Agent/Registrar at the close of business
on the last business day next preceding the date of mailing of such notice. Any accrued interest due
,,,,,, upon the redemption of this Bond prior to maturity as provided herein shall be paid to the Registered
Owner upon presentation and surrender of this Bond for redemption and payment at the designated
corporate trust office of the Paying Agent/Registrar (unless the redemption date is a regularly
.~. scheduled interest payment date, in which case accrued interest on such redeemed Bonds shall be
payable in the regular manner described above). The City covenants with the Registered Owner of
this Bond that on or before each principal payment date, interest payment date and accrued interest
•• payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest
and Sinking Fund" created by the Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying
`~" Agent/Registrar is located are authorized by law or executive order to close, or the United States
Postal Service is not open for business, then the date for such payment shall be the next succeeding
day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
'"'"' authorized to close, or the United States Postal Service is not open for business; and payment on
such date shall have the same force and effect as if made on the original date payment was due.
~"~ THIS BOND is one of a series of Bonds dated as of February 1, 2007, authorized in
accordance with the Constitution and laws of the State of Texas in the aggregate principal amount
of $4,365,000 FOR THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S
OUTSTANDING COMBINATIDNTAXANDRFVENUE CERTIFICATES OFOBLIGATION,
SERIES 1998 AND TO PAY COSTS OF ISSUANCE.
ON ANY DATE, the Bonds of this series 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 the "Prepayment Fee", computed pursuant to Section 15 of the
Ordinance, if any, plus accrued interest to the date fixed for redemption.
AT LEAST 10 days prior to the date fixed for any optional redemption of the Bond or
portions thereof prior to maturity a written notice of such redemption shall be sent by the City by
United States mail, first-class postage prepaid, to the registered owner at its address as it appeared
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on the Registration Books on the day such notice of redemption is mailed; provided, however, that
'"" the failure of the registered owner to receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption
of this Bond. By the date fixed for any such redemption, due provision shall be made for the
""' payment of the required redemption price for the Bond or portions thereof which are to be so
redeemed. If such written notice of redemption is sent and if due provision for such payment is
made, all as provided above, the Bond or portions thereof which are to be so redeemed thereby
'~ automatically shall be treated as redeemed prior to its scheduled maturity, and shall not bear interest
after the date fixed for redemption, and shall not be regarded as being outstanding except for the
right of the registered owner to receive the redemption price from the City out of the funds provided
for such payment.
,~„ ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Ordinance, this Bond, may, at the request of the Registered Owner or the assignee or assignees
,~„ hereof, be assigned, transferred and exchanged for a like aggregate principal amount of fully
registered Bonds, without interest coupons, payable to the appropriate Registered Owner, assignee
or assignees, as the case maybe, having the same denomination or denominations in any integral
multiple of $5,000 as requested in writing by the appropriate Registered Owner, assignee or
assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among
other requirements for such assignment and transfer, this Bond must be presented and surrendered
to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this
""' Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees
in whose name or names this Bond or any such portion or portions hereof is or are to be registered.
The form of Assignment printed or endorsed on this Bond may be executed by the Registered Owner
"" to evidence the assignment hereof, but such method is not exclusive, and other instruments of
assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this
Bond or any portion or portions hereof from time to time by the Registered Owner. The Paying
Agent/Registrar'sreasnnable standard or customary fees and charges for transferring and exchanging
any Bond or portion thereof shall be paid by the City, but any taxes or governmental charges required
to be paid with respect thereto shall be paid by the one requesting such assignment, transfer or
exchange as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar
shall not be required to make any such transfer or exchange during the period commencing with the
close ofbusiness on any Record Date and ending with the opening ofbusiness on the next following
principal or interest payment date.
,,,~ IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City, resigns,
or otherwise ceases to act as such, the City has covenanted in the Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be
,., mailed to the Registered Owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
.w authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
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performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a
general obligation of the City, issued on the full faith and credit thereof; and that ad valorem taxes
sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
""` comes due, and as such principal matures, have been levied and ordered to be levied against all
taxable property in the City, and have been pledged for such payment, within the limits prescribed
by law, all as provided in the Ordinance authorizing the Bonds.
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THE CITYaIso has reserved the right to amend the Ordinance as provided therein, and under
some (but not all) circumstances amendments thereto must be approved by the registered owners of
w. a majority in aggregate principal amount of the outstanding Bonds.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such terms and
provisions, acknowledges that the Ordinance is duly recorded and available for inspection in the
,,,,, official minutes and records of the governing body of the City, and agrees that the terms and
provisions of this Bond and the Ordinance constitute a contract between each Registered Owner
hereof and the City.
IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the City, and countersigned with the manual or facsimile
+~•~ signature of the City Secretary of the City, and the official seal of the City has been duly impressed,
or placed in facsimile, on this Bond.
Countersigned:
""' (facsimile signature) (facsimile signature)
City Secretary, City of Kennedale, Texas Mayor, City of Kennedale, Texas
(CITY SEAL)
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FORM OF REGISTRATION CERTIFICATE
OF THE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
`~ I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
(COMPTROLLER'S SEAL) Comptroller of Public Accounts
of the State of Texas
~. FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
+~ (To be executed if this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
""" It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described in the text of this Bond; and that this Bond has been issued in exchange for a certificate
of obligation or certificates of obligation, or a portion of a certificate of obligation or certificates of
""` obligation of a series which originally was approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts of the State of Texas.
Dated
BANK OF AMERICA, N.A.
FORT WORTH, TEXAS
Paying Agent/Registrar
By
Authorized Representative
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ASSIGNMENT
'"' FOR VALUE RECEIVED, the undersigned Registered Owner of this Bond, or duly
authorized representative or attorney thereof, hereby sells, assigns and transfers this Bond and all
rights hereunder unto
/ /
(Assignee's Social Security or (Please print or typewrite Assignee's name and address,
Taxpayer Identification Number) including zip code)
FORM OF ASSIGNMENT:
„~ and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated:
~• Signature Guaranteed:
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NOTICE: Signature(s) must be guaranteed by
a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
W.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Bond in every particular, without alteration or
enlargement or any change whatsoever.
INITIAL BOND INSERTIONS
The Initial Bond shall be in the form set forth above except that:
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(A) Immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall be completed with the words "As shown below".
(B) The first paragraph shall be deleted and the following shall be inserted:
«r.
"ON THE RESPECTIVE MATURITY DATES specified below, the CITY OF
KENNEDALE, TEXAS (the "City"), in Tarrant County, Texas, being a political subdivision and
,~,,, municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner
specified above, or registered assigns (hereinafter called the "Registered Owner"), the respective
Principal Installments specified below, and to pay interest thereon (calculated on the basis of a 360-
.. day year composed of twelve 30-day months) from the Date of Delivery, as set forth above, at the
respective Interest Rates per annum specified below, payable on August 15, 2007, and semiannually
on each February 15 and August 15 thereafter to the respective Maturity Dates specified below, or
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~" [Insert principal and interest information from Sections 2 and 3 aboveJ"
(C) The Initial Bond shall be numbered "T-1."
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SECTION C. INTEREST AND SINHING FUND; TAX LEVY. A special Interest and
Sinking Fund for the Bonds (the "Interest and Sinking Fund") is hereby created solely for the
w benefit of the Bonds, and the Interest and Sinking Fund shall be established and maintained by the
City at an official depository bank of the City. The Interest and Sinking Fund shall be kept separate
,~ and apart from all other funds and accounts of the City, and shall be used only for paying the interest
on and principal of the Bonds. All ad valorem taxes levied and collected for and on account of the
Bonds shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each
,,,,, year while any of the Bonds or interest thereon are outstanding and unpaid, the City shall compute
and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the
money required to pay the interest on the Bonds as such interest comes due, and to provide and
,~,,. maintain a sinking fund adequate to pay the principal of its Bonds as such principal matures (but
never less than 2% of the original principal amount of the Bonds as a sinking fund each year); and
said tax shall be based on the latest approved tax rolls of the City, with full allowance being made
for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby
levied, and is hereby ordered to be levied, against all taxable property in the City for each year while
any of the Bonds or interest thereon are outstanding and unpaid; and said tax shall be assessed and
+~ collected each such year and deposited to the credit of the respective Interest and Sinking Fund. Said
ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Bonds,
as such interest comes due and such principal matures, are hereby pledged for such payment, within
'"^` the limit prescribed by law.
SECTION 7. INVESTMENTS. Funds on deposit in the Interest and Sinking Fund shall be
"'"" secured by the depository bank of the City in the manner and to the extent required by law to secure
other public funds of the City and maybe invested from time to time in any investment authorized
by applicable law, including but not limited to the Public Funds Investment Act (Chapter 2256,
`~` Texas Government Code), and the City's investment policy adopted in accordance with the
provisions of the Public Funds Investment Act; provided, however, that investments purchased for
and held in the Interest and Sinking Fund shall have a final maturity no later than the next principal
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the date of redemption prior to maturity. The respective Maturity Dates, Principal Installments and
Interest Rates for this Bond are set forth in the following schedule:
or interest payment date for which such funds are required. Income and profits from such
investments shall be deposited in the Interest and Sinking Fund. It is further provided, however, that
any interest earnings on Bond proceeds which are required to be rebated to the United States of
America pursuant to Section 12 hereof in order to prevent the Bonds from being arbitrage bonds
'"" shall be so rebated and not considered as interest earnings for the purposes of this Section.
SECTION H. EMPOWERED. The City Manager and the Finance Director are hereby
`°" ordered to do any and all things necessary to accomplish the transfer of monies to the Interest and
Sinking Fund of this issue in ample time to pay such items of principal and interest.
SECTION 9. DEFEASANCE OF THE BONDS. (a) Any Bond and the interest thereon
shall be deemed to be paid, retired and no longer outstanding (a "Defeased Bond') within the
„r meaning of this Ordinance, except to the extent provided in subsection (d) of this Section, when
payment of the principal of such Bond, plus interest thereon to the due date (whether such due date
be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in
~„ accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying Agent/Registrar in accordance with
an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment
w.. (1) lawful money of the United States of America sufficient to make such payment or (2) Defeasance
Securities that mature as to principal and interest in such amounts and at such times as will insure
the availability, without reinvestment, of sufficient money to provide for such payment, and when
+~ proper arrangements have been made by the City with the Paying Agent/Registrar for the payment
of its services until all Defeased Bonds shall have become due and payable. At such time as a Bond
shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon
"Y' shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein
levied and pledged as provided in this Ordinance, and such principal and interest shall be payable
solely from such money or Defeasance' Securities. Notwithstanding any other provision of this
""" Ordinance to the contrary, it is hereby provided that any determination not to redeem Defeased
Bonds that is made in conjunction with the payment arrangements specified in subsection (a)(i) or
(ii) of this Section shall not be irrevocable, provided that: (1) in the proceedings providing for such
"" payment arrangements, the City expressly reserves the right to call the Defeased Bonds for
redemption; (2) gives notice of the reservation of that right to the owners of the Defeased Bonds
immediately following the making of the payment arrangements; and (3) directs that notice of the
'~ reservation be included in any redemption notices that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
~.
direction of the City be invested in Defeasance Securities, maturing in the amounts and times as
hereinbefore set forth, and all income from such Defeasance Securities received by the Paying
,~„ Agent/Registrar that is not required for the payment of the Bonds and interest thereon, with respect
to which such money has been so deposited, shall be turned over to the City, or deposited as directed
in writing by the City. Any Future Escrow Agreement pursuant to which the money and/or
~.. Defeasance Securities are held for the payment of Defeased Bonds may contain provisions
permitting the investment or reinvestment of such moneys in Defeasance Securities or the
substitution of other Defeasance Securities upon the satisfaction of the requirements specified in
»• subsection (a)(i) or (ii) of this Section. All income from such Defeasance Securities received by the
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Paying Agent/Registrartyhich is not required for the payment of the Defeased Bonds, with respect
«r to which such money has been so deposited, shall be remitted to the City or deposited as directed in
writing by the City.
'`" (c) The term "Defeasance Securities" means (i) direct, noncallable obligations of the
United States of America, including obligations that are unconditionally guaranteed by the United
States of America, (ii) noncallable obligations of an agency or instrumentality ofthe United States
'~" of America, including obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date of the purchase thereof are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent, and (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 on the date the governing body
of the City adopts or approves the proceedings authorizing the financial arrangements are rated as
to investment quality by a nationally recognized investment rating firm not less than AAA or its
equivalent.
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(d) Until all Defeased Bonds shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds the
~. same as if they had not been defeased, and the City shall make proper arrangements to provide and
pay for such services as required by this Ordinance.
(e) In the event that the City elects to defease less than all of the principal amount of
Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount
of Bonds by such random method as it deems fair and appropriate.
SECTION 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost,
'"` stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered,
a new certificate of obligation of the same principal amount, maturity, and interest rate, as the
damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner
`~"` hereinafter provided.
(b) implication orReplacementBonds. Application forreplacement ofdamaged,mutilated,
~" lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered owner applying
for a replacement certificate of obligation shall furnish to the City and to the Paying Agent/Registrar
such security or indemnity as may be required by them to save each of them harmless from any loss
or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the
,~,,, registered owner shall furnish to the City and to the Paying Agent/Registrar evidence to their
satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of
damage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar
~,, for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the
event any such Bond shall have matured, and no default has occurred which is then continuing in the
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payment of the principal of, redemption premium, if any, or interest on the Bond, the City may
"~" authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished
as above provided in this Section.
(d) Char e or Issuing Replacement Bonds. Prior to the issuance of any replacement
certificate of obligation, the Paying Agent/Registrarsha1l charge the registered owner of such Bond
""~ with all legal, printing, and other expenses in connection therewith. Every replacement certificate
of obligation issued pursuant to the provisions of this Section by virtue of the fact that any Bond is
lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the lost,
stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be
entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds
,~ duly issued under this Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Chapter 1201, Texas
,,,,, Government Code, as amended, this Section of this Ordinance shall constitute authority for the
issuance of any such replacement certificate of obligation without necessity of further action by the
governing body of the City or any other body or person, and the duty of the replacement of such
~ certificates of obligations is hereby authorized and imposed upon the Paying Agent/Registrar, and
the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and
with the effect, as provided in Section 4(a) of this Ordinance for Bonds issued in exchange for other
Bonds.
SECTION 11. CUSTODY, APPROVAL, AND REGISTRATION OF THE BONDS;
""' BOND COUNSEL'S OPINION, BOND INSURANCE, AND CUSIP NUMBERS. The Mayor
of the City is hereby authorized to have control of the Bonds initially issued and delivered hereunder
and all necessary records and proceedings pertaining to the Bonds pending their delivery and their
" investigation, examination, and approval by the Attorney General of the State of Texas, and their
registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the
Bonds said Comptroller of Public Accounts (or a deputy designated in writing to act for said
'""~ Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Bonds,
and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. The
approving legal opinion of the City's Bond Counsel (with an appropriate certificate pertaining thereto
~` executed by facsimile signature of the City Secretary of the City) and the assigned CUSIP numbers
(if obtained) may, at the option of the City, be printed on the Bonds issued and delivered under this
w~ Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and
information of the registered owners of the Bonds.
,,,., SECTION 12. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON
THE BONDS. (a) Covenants. The City covenants to take any action necessary to assure, or refrain
from any action which would adversely affect, the treatment of the Bonds as obligations described
,., in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which
is not includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the City covenants as follows:
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(1) to take any action to assure that no more than 10 percent of the proceeds of the
"~ Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if any)
are used for any "private business use," as defined in section 141(b)(6) of the Code or, if
more than 10 percent of the proceeds of the Bonds or the projects financed therewith are so
"` used, such amounts, whether or not received by the City, with respect to such private
business use, do not, under the terms of this Ordinance or any underlying arrangement,
directly or indirectly, secure or provide for the payment of more than 10 percent of the debt
"~ service on the Bonds, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
ww described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
;~ amount in excess of 5 percent is used fora "private business use" which is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental
use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve
w.. fund, if any) is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141(c) of the Code;
.r. (4) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
~"" (6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a
'""' materially higher yield over the term of the Bonds, other than investment property acquired
with --
(A) proceeds of the Bonds invested for a reasonable temporary period of 90
days,
(B) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
,,.,, Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
~.. proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene
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the requirements of section 148 of the Code (relating to arbitrage) and, to the extent
"'~' applicable, section 149(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five-year period
""' (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent
of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the
United States of America, not later than 60 days after the Bonds have been paid in full, 100
percent of the amount then required to be paid as a result of Excess Earnings under section
148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the City for the sole benefit of the United States of America, and such
,,,,,, fund shall not be subject to the claim of any other person, including without limitation the
bondholders. The Rebate Fund is established for the additional purpose of compliance with section
148 of the Code.
(c) Proceeds. The City understands that the term "proceeds" includes "disposition
proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred
~•• proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the
Bonds. It is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U. S. Department of the
w. Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which
modify or expand provisions of the Code, as applicable to the Bonds, the City will not be required
to comply with any covenant contained herein to the extent that such failure to comply, in the
'""' opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal
income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations
or rulings are hereafter promulgated which impose additional requirements which are applicable to
"" the Bonds, the City agrees to comply with the additional requirements to the extent necessary, in the
opinion of nationally recognized bond counsel, to preserve the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention,
~` the City hereby authorizes and directs the Mayor, the City Manager or the Finance Director of the
City to execute any documents, certificates or reports required by the Code and to make such
elections, on behalf of the City, which may be permitted by the Code as are consistent with the
~ purpose for the issuance of the Bonds.
(d) Disposition of Proiect. The City covenants that the property constituting the proj ects
financed or refinanced with the proceeds of the Bonds will not be sold or otherwise disposed in a
transaction resulting in the receipt by the City of cash or other compensation, unless the City obtains
an opinion of nationally-recognized bond counsel that such sale or other disposition will not
adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing, the portion of
the property comprising personal property and disposed in the ordinary course shall not be treated
as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the City
shall not be obligated to comply with this covenant if it obtains an opinion that such failure to
complywill not adversely affect the excludability for federal income tax purposes from gross income
of the interest,
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(e) Qualified Tax-Exempt Obligations. The City hereby designates the Bonds 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 Bonds are issued, the City (including any subordinate entities) has not designated
"` nor will designate bonds or other obligations, which when aggregated with the Bonds, will result in
more than $10,000,000 of "qualified tax-exempt obligations" being issued; (b) that the City
reasonably anticipates that the amount oftax-exempt obligations issued during the calendar yeaz in
"~ which the Bonds aze issued by the City (or any subordinate entities) will not exceed $10,000,000;
and, (c) that the City will take such action or refrain from such action as necessary, and as more
~, particularly set forth in this Section, in order that the Bonds will not be considered "private activity
bonds" within the meaning of section 141 of the Code.
~ SECTION 13. NO RULE 15c2-12 UNDERTAHING. The City has not made an undertaking
in accordance with Rule 1 Sc2-12 ofthe Securities and Exchange Commission (the "Rule"). The City
is not, therefore, obligated pursuant to the Rule to provide any on-going disclosure relating to the
irw City or the Bonds.
SECTION 14. SALE AND DELIVERY OF BONDS. The Bonds are hereby initially sold
~rr- and shall be delivered to Bank ofAmerica, N.A. (the "Purchaser") for cash for the par value thereof.
The Bonds shall initially be registered in the name of the Purchaser. It is hereby officially found,
determined, and declazed that the terms of this sale are the most advantageous reasonably obtainable.
«.
SECTION 15. PREPAYMENT FEE. Upon prepayment of all or part of the principal
amount of the Bonds before the final maturity, the City will pay the Purchaser an additional fee, the
""" "Prepayment Fee." The Prepayment Fee shall be equal to the greater of (i) zero, or (ii) the
Mazk-to-Mazket adjustment.
For the purposes of this Section 15, the following definitions shall apply:
(a) Mazk-to-Market Adjustment: The amount, calculated on any prepayment date, which
~. is derived by subtracting: (i) the principal amount of the Bonds to be prepaid as of such prepayment
date, from (ii) the Mark-to-Market Value of the Bonds to be prepaid on such prepayment date.
r.
(b) 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 Bonds if the Purchaser had instead invested the proceeds of the
Bonds 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 Mazket Funds Rate for the maturity matching that of each specific payment
of principal and/or interest.
~.
(c) Initial Blended Money Mazket 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
19
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would be attainable by the Purchaser if it borrowed funds with an interest payment frequency and
"" principal repayment schedule matching that of the Bonds. 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 Bonds 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.
"~` (d) 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
Bond 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.
,... SECTION 16. APPROVAL OF REFUNDING OF REFUNDED OBLIGATIONS.
Concurrently with the initial delivery of the Bonds, the City shall deposit an amount from the
proceeds from the sale of the Bonds and other available funds of the City, if required, with The Bank
«.- of New York Trust Company, National Association, Dallas, Texas (as successor to U.S. Trust
Company of Texas, Dallas, Texas), the Paying Agent/Registrar for the Refunded Obligations,
sufficient to provide for the refunding of the Refunded Obligations, all in accordance with Chapter
"'"' 1207.
SECTION 17. NOTICE OF REDEMPTION OF REFUNDED OBLIGATIONS. There
'""' is attached to this Ordinance as Exhibit B and made a part hereof for all purposes a NOTICE OF
REDEMPTION for the Refunded Obligations. As soon as practicable after the adoption of this
Ordinance, a copy of the NOTICE OF REDEMPTION shall be sent to all registered owners of the
"`~ Refunded Obligations by first class mail postage prepaid, addressed to such registered owners at their
respective addresses shown on the registration books of the paying agent/registrar for the Refunded
Obligations.
SECTION 18. AUTHORITY FOR OFFICERS TO EXECUTE DOCUMENTS AND
APPROVE CHANGES. The Mayor, City Manager, and City Secretary of the City, and all other
officers, employees, and agents of the City, and each of them, shall be and they are hereby expressly
authorized, empowered, and directed from time to time and at any time to do and perform all such
,,,,, acts and things and to execute, acknowledge, and deliver in the name and under the corporate seal
and on behalf of the City all such instruments, whether or not herein mentioned, as may be necessary
or desirable in order to carry out the terms and provisions of this Ordinance, the Bonds, the sale of
+~ the Bonds, the Official Statement, and the Paying Agent/Registrar Agreement. In addition, prior to
the initial delivery of the Bonds, the Mayor, City Secretary, City Manager, City Attorney and Bond
Counsel are hereby authorized and directed to approve any technical changes or correction to this
+~ Ordinance or to any of the instruments authorized and approved by this Ordinance necessary in order
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20
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to (i) correct any ambiguity or mistake or properly or more completely document the transactions
'~ contemplated and approved by this Ordinance and as described in the Official Statement, (ii) obtain
a rating from any of the national bond rating agencies or satisfy any requirements of the provider of
a municipal bond insurance policy, if any, or (iii) obtain the approval of the Bonds by the Attorney
""" General's office. Incase any officer whose signature shall appear on any Bond shall cease to be such
officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for
all purposes the same as if such officer had remained in office until such delivery.
~.
SECTION 19. ORDINANCE A CONTRACT; AMENDMENTS. This Ordinance shall
constitute a contract with the Registered Owners of the Bonds, binding on the City and its
successors and assigns, and shall not be amended or repealed by the City as long as any Bond
remains outstanding except as permitted in this Section. The City may, without the consent of or
„~, notice to any Registered Owners, amend, change, or modify this Ordinance as maybe required (i)
by the provisions hereof, (ii) for the purpose of curing any ambiguity, inconsistency, or formal defect
or omission herein, or (iii) in connection with any other change which is not to the prejudice of the
„~, Registered Owners. The City may, with the written consent of the Registered Owners of a majority
in aggregate principal amount of the Bonds then outstanding affected thereby, amend, change,
modify, or rescind any provisions of this Ordinance; provided that without the consent of all of the
,w. Registered Owners affected, no such amendment, change, modification, orrescission shall (i) extend
the time or times of payment of the principal of and interest on the Bonds, reduce the principal
amount thereof or the rate of interest thereon, (ii) give any preference to any Bond over any other
+~ Bond, (iii) extend any waiver of default to subsequent defaults, or (iv) reduce the aggregate principal
amount of Bonds required for consent to any such amendment, change, modification, orrescission.
Whenever the City shall desire to make any amendment or addition to or rescission of this Ordinance
'°^ requiring consent of the Registered Owners, the City shall cause notice of the amendment, addition,
or rescission to be sent by first class mail, postage prepaid, to the Registered Owners at the respective
addresses shown on the Registration Books. Whenever at any time within one year after the date of
"" the giving of such notice, the City shall receive an instrument or instruments in writing executed by
the Registered Owners of a majority in aggregate principal amount of the Bonds then outstanding
affected by any such amendment, addition, or rescission requiring the consent of the Registered
""~ Owners, which instrument or instruments shall refer to the proposed amendment, addition, or
rescission described in such notice and shall specifically consent to and approve the adoption thereof
in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise,
the City may adopt such amendment, addition, or rescission in substantially such form, except as
herein provided. No Registered Owner may thereafter object to the adoption of such amendment,
addition, or rescission, or to any of the provisions thereof, and such amendment, addition, or
~..
rescission shall be fully effective for all purposes.
,,,, SECTION 20. SECURITY INTEREST. Chapter 1208, Texas Government Code, applies
to the issuance of the Bonds and the pledge of the ad valorem taxes granted by the City under Section
6 of this Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any
,~ time while the Bonds are outstanding and unpaid such that the pledge of the ad valorem taxes
granted by the City under Section 6 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Texas Business & Commerce Code, then in order to preserve to the registered owners of
the Bonds the perfection of the security interest in said pledge, the City agrees to take such measures
0
21
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as it determines are reasonable and necessary under Texas law to comply with the applicable
~ provisions of Chapter 9, Texas Business & Commerce Code, and enable a filing to perfect the
security interest in said pledge to occur.
""" SECTION 21. REMEDIES IN EVENT OF DEFAULT. In addition to all the rights and
remedies provided by the laws of the State of Texas, it is specifically covenanted and agreed
particularly that in the event the City (i) defaults in the payment of the principal, premium, if any,
"' or interest on the Bonds, (ii) defaults in the deposits and credits required to be made to the Interest
and Sinking Fund, or (iii) defaults in the observance or performance of any other of the covenants,
conditions or obligations set forth in this Ordinance, the Holders of any of the Bonds shall be entitled
`~ to seek a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the
governing body of the City and other officers of the City to observe and perform any covenant,
,~„ condition or obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall impair
,~,, any such right or power or shall be construed to be a waiver of any such default or acquiescence
therein, and every such right and power maybe exercised from time to time and as often as maybe
deemed expedient. The specific remedy herein provided shall be cumulative of all other existing
,^,,, remedies, and the specification of such remedy shall not be deemed to be exclusive.
SECTION 22. INTERESTED PARTIES. Nothing in this Ordinance expressed or implied
+•~ is intended or shall be construed to confer upon, or to give to, any person or entity, other than the
City, the Underwriters and the registered owners of the Bonds, any right, remedy or claim under or
by reason of this Ordinance or any covenant, condition or stipulation hereof, and all covenants,
r. stipulations, promises and agreements in this Ordinance contained by and on behalf of the City shall
be for the sole and exclusive benefit of the City, the Underwriters and the registered owners of the
Bonds.
...
SECTION 23. INCORPORATION OF RECITALS. The City hereby finds that the
statements set forth in the recitals of this Ordinance are true and correct, and the City hereby
'"" incorporates such recitals as a part of this Ordinance.
SECTION 24. SEVERABILITY. If any provision of this Ordinance or the application
'"~ thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and this governing body
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 25. EFFECTIVE DATE. Pursuant to the provisions of Section 1201.028, Texas
~,,, Government Code, this Ordinance shall become effective immediately after its is approved by the
City Council.
[The remainder of this page left blank intentionally.)
22
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"~"` PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
KENNEDALE, TEXASATAREGULARMEETINGONTHEIITHDAYOFJANUARY, 2007,
AT WHICH MEETING A QUORUM WAS PRESENT.
ATTEST:
City Secretary, City of Kennedale, Texas
Gail ~~~GUr'~
Mayor, City of Kennedale, Texas
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** ** **
[SIGNATURE PAGE TO BOND ORDINANCE]
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EXHIBIT A
FORM OF PAYING AGENT/REGISTRAR AGREEMENT
~` THE PAYING AGENT/REGISTRAR AGREEMENT IS OMITTED AT THIS POINT
AS IT APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT.
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+~
EXHIBIT B
NOTICE OF REDEMPTION
of
CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998
""' (Maturing on February 15 in the years 2008-2019, 2021 and 2024)
NOTICE IS HEREBY GIVEN that the City of Kennedale, Texas (the "City"), in Tarrant County, Texas, has
~r called for redemption at the redemption price equal to par, plus accrued interest, on February 1 S, 2007 (the "Redemption
Date"), all of the City's outstanding Combination Tax and Revenue Certificates of Obligation, Series 1998, dated
November 1, 1998, maturing on February 15 in the years 2008 through 2019, inclusive, 2021 and 2024 which are further
described as follows (the "Certificates"):
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CITY OF ICENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998
MATURITY
(FEBRUARY 1S)
PRINCIPAL AMOUNT
MATURING IN YEAR PRINCIPAL
AMOUNT BEING
REFUNDED STATED
INTEREST
RATE (%)
CUSIP NO.
(489332)
2008 $190,000 $190,000 4.375 DVS
2009 200,000 200,000 4.375 DW3
2010 210,000 210,000 4.375 DX1
2011 225,000 225,000 4.375 DY9
2012 230,000 230,000 4.375 DZ6
2013 240,000 240,000 4.400 EAO
2014 250,000 250,000 4.450 EB8
2015 260,000 260,000 4.500 EC6
2016 275,000 275,000 4.550 ED4
2017 290,000 290,000 4.550 EE2
2018 305,000 305,000 4.600 EF9
2019 320,000 320,000 4.700 EG7
**** **** **** **** ****
2021 685,000 685,000 4.750 EJ1
**** **** **** **** ****
2024 645,000 645,000 4.800 EM4
~'r"' On February 15, 2007, interest on the Certificates shall cease to accrue and be payable.
THE CERTIFICATES shall be redeemed at The Bank of New York Trust Company, National Association,
~„ successor to U.S. Trust Company of Texas, as the Paying Agent/Registrar for said Certificates. Upon presentation of
the Certificates at the Paying Agent/Registrar on the aforementioned redemption date, the holder thereof shall be entitled
to receive the redemption price equal to par and accrued interest to the redemption date.
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NOTICE IS GIVEN that due and proper arrangements have been made for providing the place of payment of
said Certificates called for redemption with funds sufficient to pay the principal amount of said Certificates and the
w.. interest thereon to the redemption date. In the event said Certificates, or any of them are not presented for redemption
by the date fixed for their redemption, they shall not thereafter bear interest.
UNDER THE PROVISIONS of Section 3406 of the Internal Revenue Code of 1986, as amended, paying agents
,., making payments of interest and principal on municipal securities maybe obligated to withhold a tax from remittance
to individuals who have failed to furnish the paying agent with a valid taxpayer identification number. Registered holders
who wish to avoid the imposition of the tax should submit certified taxpayer identification numbers (via form W-9) when
presenting the Certificates for payment.
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THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the
issuance of the aforementioned Certificates and in accordance with the recitals and provisions of said Certificates.
"" NOTICE IS FURTHER GIVEN that the Certificates should be submitted to either of the following addresses:
,,,, Express Delivery First Class/Reeistered/Certified Mail Hand Delivery
The Bank of New York, N.A. The Bank of New York, N.A. The Bank of New York, N.A.
Institutional Trust Services Institutional Trust Services GIS Unit Trust Window
rrr 2001 Bryan Street, 9`h Floor P.O. Box 2320 New York Plaza; 1st Floor
Dallas, Texas 75201 Dallas, Texas 75221-2320 New York, New York 10004
+~.
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COMMERCIAL BANKING
Bank of America, N.A.
901 Main Street, 67th floor
Dallas, Texas 75202-3714
BankofAmeric ~~~
i
INVESTOR ACKNOWLEDGMENT LETTER
January 11, 2007
The Honorable Mayor and
;~ City Council of City of Kennedale, Texas
City of Kennedale
405 Municipal Drive
Kennedale, Texas 76060
McCall, Parkhurst & Horton L.L.P.
700 N. St. Mary's St., Suite 1525
San Antonio, Texas 78205
Southwest Securities, Inc.
4040 Broadway, Suite 220
San Antonio, Texas 78209
RE: $4,365,000 CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION
~r REFUNDING BONDS, SERIES 2007
Ladies and Gentlemen:
The undersigned (the "Purchaser"), as purchaser of $4,365,000 in principal amount of the
captioned obligations (the "Bonds"), hereby acknowledges and confirms that it has been
+.• furnished such financial, statistical and other information with respect to the CITY of
KENNEDALE, TEXAS (the "Issuer") and the Bonds, including a certified copy of the Ordinance of
the City Council of the Issuer which authorized the issuance of the Bonds (the "Ordinance"), as
,w„ the Purchaser deems necessary to enable it to make an informed investment decision with respect
to the purchase of the Bonds. The Purchaser further acknowledges that:
1. The Bonds are general obligations of the Issuer, issued on the full faith and credit
~" thereof; and ad valorem taxes sufficient to provide for the payment of interest on and principal of
the Bonds, as such interest comes due, and such principal matures, have been levied and ordered
to be levied against all taxable property in the Issuer, and have been pledged for such payment,
'~" all as provided in the Ordinance.
Fax: 817.390.6452
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Bank of America, TX1-497-02-04
500 W. 7th Street, Fort Worth, TX 76102-4700
Recycled Yaper
0
Investment.Letter re: City of Kennedale, Texas General Obligation Refunding Bonds, Series 2007
~ January I1, 2007
Page 2
'"~ 2. The Purchaser, as a financial institution, has sufficient knowledge and experience in
financial and business matters, including purchase and ownership of municipal and other tax-
exempt obligations of a nature similar to the Bonds to be able to evaluate the risks and merits of
"" the investment represented by the purchase of the Bonds.
3. The Purchaser is acquiring the Bonds for its own account as evidence of a loan or for
.•• the account of institutions which meet the representations set forth herein, and not with a view to,
or for sale in connection with, any distribution of the Bonds or any part thereof. The Purchaser
has not offered to sell, solicited offers to buy, or agreed to sell the Bonds or any part thereof, and
~, the Purchaser has no present intention of reselling or otherwise disposing of the Bonds.
4. As a sophisticated investor, the Purchaser has made its own credit inquiry and analysis
with respect to the Issuer and the Bonds, and has made an independent credit decision based
"'~ upon such inquiry and analysis. The Issuer has furnished to the Purchaser all the information
which the Purchaser as a reasonable investor has requested of the Issuer, and the Purchaser has
had the opportunity to ask questions of and receive answers from knowledgeable individuals
"~ concerning the Issuer and the Bonds. The Purchaser is able and willing to bear the economic risk
of the purchase and ownership of the Bonds.
w.. 5. Southwest Securities, Inc. (the Issuer's financial advisor) and McCall, Parkhurst &
Horton L.L.P. (the Issuer's bond counsel) have not undertaken steps to ascertain the accuracy or
completeness of information furnished to the Purchaser with respect to the Issuer, and the
,~„ Purchaser has not looked to either of those firms or entities for, nor have either of them made,
any representations to the Purchaser with respect to that information.
6. The Purchaser understands that the Bonds have not been rated by any rating agency or
~"" registered with any federal or state securities agency or commission.
7. It is understood and agreed that the Purchaser is buying the Bonds in a private
placement by the Issuer to the Purchaser. The Bonds are exempt from any federal securities
registration requirements by virtue of Section 3(a)(2) of the Securities Act of 1933. The private
placement of the Bonds is exempt from the provisions of Rule 15c2-12 of the Securities and
.,, Exchange Commission (the "Rule"); consequently the Issuer has not undertaken to make any on-
going disclosures for the benefit of the registered owner of the Bonds in accordance with the
Rule.
"~ 8. The Issuer will provide the Purchaser with its audited annual financial statements
within 270 days after each fiscal year end and any other financial information regarding the
Issuer that the Purchaser may reasonably request from time to time.
The remainder of this page intentionally left blank.]
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Investment Letter re: City of Kennedale, Texas General Obligation Refunding Bonds, Series 2007
January 11, 2007
..~
Page 3
Very truly yours,
'~' THE PURCHASER:
Bank of America, N.A.
901 Main Street, 67th floor
~+ Dallas, Texas 75202-3714
By:
Title: ~i ~ ~
,~
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PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of February 1, 2007 (this "Agreement"), by and
between the CITYOFKENNEDALE, TEXAS (the "Issuer"), and BANKOFAMERICA, N.A. (the "Bank"),
.r. a national banking association duly organized and operating under the laws of the United States
of America.
~. WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
Kennedale, Texas General Obligation Refunding Bonds, Series 2007" (the "Securities"), such
Securities to be issued in fully registered form only as to the payment of principal and interest
~.. thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof on
or about February 15, 2007; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
„~, connection with the payment of the principal of, premium, if any, and interest on the Securities and
with respect to the registration, transfer, and exchange thereof by the registered owners thereof; and
.,~„ WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer
and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
,,, APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
SECTION 1.01. APPOINTMENT. The Issuer hereby appoints the Bank to serve as Paying
~, Agent with respect to the Securities. As Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof, all in accordance
„~, with this Agreement and the "Ordinance" (hereinafter defined).
The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar
,~ for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the Ordinance, a copy of which books and records shall be maintained at the
office of the Bank located in the State of Texas or shall be available to be accessed from such office
located in the State of Texas.
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
SECTION 1.02. COMPENSATION. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Schedule A attached hereto for the first year of this Agreement and thereafter the fees and amounts
~. set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for
municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the
Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year.
..
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any of the
++~ provisions hereof (including the reasonable compensation and the expenses and disbursements of
its agents and counsel).
•^ ARTICLE TWO
DEFINITIONS
SECTION 2.01. DEFINITIONS. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means, if applicable, the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any Security which
has become accelerated pursuant to the terms of the Security.
"Bank Office" means the corporate trust office of the Bank as indicated on the signature page
hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security is
registered in the Security Register.
,,, "Issuer Request" and "Issuer Order" means a written request or order signed in the name of
the Issuer by the Mayor or City Secretary of the Issuer or the City Manager or chief financial officer
of the Issuer, any one or more of said officials, delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
„r„ "Ordinance" means the ordinance, order or resolution of the governing body of the Issuer
pursuant to which the Securities are issued, certified by the Secretary or any other officer of the
Issuer and delivered to the Bank.
"Person" means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government.
"Predecessor Securities" ofanyparticular Securitymeans everyprevious Security evidencing
,~ all or a portion of the same obligation as that evidenced by such particular Security (and, for the
purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement
Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Ordinance).
"Redemption Date" when used with respect to any Security to be redeemed means the date
fixed for such redemption pursuant to the terms of the Ordinance.
2
r.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice-
Chairman of the Board of Directors, the Chairman or Vice-chairman of the Executive Committee
of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar
to those performed by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the Issuer providing
for the registration and transfer of the Securities.
W "Stated Maturity" means the date specified in the Ordinance the principal of a Security is
scheduled to be due and payable.
~.~+ SECTION 2.02. OTHER DEFINITIONS. The terms "Bank," Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
~. The term "Paying AgentlRegistrar" refers to the Bank in the performance of the duties and
functions of this Agreement.
ARTICLE THREE
PAYING AGENT
~. SECTION 3.01. DUTIES OF PAYING AGENT. (a) As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay
on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or
,~. Acceleration Date, to the Holder upon surrender of the Security to the Bank at the Bank Office.
(b) As Paying Agent, the Bank shall, provided adequate collected funds have been provided
„~ to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid each Holder and preparing and
sending checks by United States mail, first class postage prepaid, on each payment date, to the
,~„ Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the
address appearing on the Security Register or by such other method, acceptable to the Bank,
requested in writing by the Holder at the Holder's risk and expense.
..
(c) To the extent required by the Internal Revenue Code of 1986 and the regulations
promulgated thereunder, the Bank shall report to the Holders and the Internal Revenue Service (i)
~„ the amount of "reportable payments", if any, subj ect to backup withholding during each year and the
amount of tax withheld, if any, with respect to payments of the Securities and (ii) the amount of
interest or amount treated as interest on the Securities and required to be included in gross income
,~„ of the Holder thereof.
SECTION 3.02. PAYMENT DATES. The Issuer hereby instructs the Bank to pay the principal
,,,, of and interest on the Securities on the dates specified in the Ordinance.
r-
ARTICLE FOUR
REGISTRAR
~ SECTION 4.01. SECURITY REGISTER -TRANSFERS AND EXCHANGES. The Bank agrees to
keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
~+ Holders of the Securities, the transfer, exchange, and replacement of the Securities, and the payment
of the principal of and interest on the Securities to the Holders and containing such other information
as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer
and the Bank may prescribe. All transfers, exchanges, and replacement of Securities shall be noted
in the Security Register. The Bank represents and warrants that its office in Austin and/or Houston,
Texas will at all times have immediate access to the Security Register by electronic or other means
+~ and will be capable of producing a hard copy at its Austin and/or Houston, Texas office for use by
the Issuer.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed by an
officer of a federal or state bank or a member of the National Association of Securities Dealers, in
~. form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in
writing.
r.. The Bank may request any supporting documentation it feels necessary to effect a re-
registration, transfer, or exchange of the Securities.
W. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation
to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be
completed and new Securities delivered to the Holder or the assignee of the Holder in not more than
three business days after the receipt of the Securities to be cancelled in an exchange or transfer and
the written instrument of transfer or request for exchange duly executed by the Holder, or his duly
authorized agent, in form and manner satisfactory to the Paying Agent/Registrar.
..
SECTION 4.02. SECURITIES. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
,,,, printed Securities will be kept in safekeeping pending their use, and reasonable care will be exercised
by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care
maintained by the Bank for debt securities of other political subdivisions or corporations for which
~,,,, it serves as registrar, or that is maintained for its own securities.
SECTION 4.03. FORM OF SECURITY REGISTER. The Bank, as Registrar, will maintain the
,,,,, Security Register relating to the registration, payment, transfer, and exchange of the Securities in
accordance with the Bank's general practices and procedures in effect from time to time. The Bank
shall not be obligated to maintain such Security Register in any form other than those which the
~„ Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
~,,, being converted into written form within a reasonable time.
4
r.
r.
"'~' SECTION 4.04. LIST OF SECURITY HOLDERS. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained in the
Security Register. The Issuer may also inspect the information contained in the Security Register
+~+ 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.
Unless required by law, the Bank will not release or disclose the contents of the Security
Register 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 court order or as otherwise required by law. Upon receipt of
a court order and prior to the release or disclosure of the contents of the Security Register, the Bank
will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of
the contents of the Security Register.
SECTION 4.05. RETURN OF CANCELLED SECURITIES. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for
+~ which other Securities have been issued, or which have been paid.
SECTION 4.06. MUTILATED, DESTROYED, LOST, OR STOLEN SECURITIES. The Issuer
hereby instructs the Bank, subject to the applicable provisions of the Ordinance, to deliver and issue
Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the
same does not result in an over issuance.
In case any Security shall be mutilated, or destroyed, lost, or stolen, the Bank, in its
discretion, may execute and deliver a replacement Security of like form and tenor, and in the same
W. denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed, lost, or
stolen Security, only after (i) the filing by the Holder thereof with the Bank of evidence satisfactory
,r. to the Bank of the destruction, loss, or theft of such Security, and of the authenticity of the ownership
thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the
Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with
,r,,, the preparation, execution, and delivery of a replacement Security shall be borne by the Holder of
the Security mutilated, or destroyed, lost, or stolen.
,~„ SECTION 4.07. TRANSACTION INFORMATION TO ISSUER. The Bank will, within a
reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to
the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or
~,. exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for
or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
,~,,, SECTION 5.01. DUTIES OF BANK. The Bank undertakes to perform the duties set forth herein
and in the Ordinance and agrees to use reasonable care in the performance thereof.
~.
...
~. SECTION 5.02. 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.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own funds
++• or otherwise incur any financial liability for performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not
assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon any
~+. resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, security, or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties. Without limiting the generality of the foregoing
.. statement, the Bank need not examine the ownership of any Securities, but is protected in acting
upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer
which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not
~. be bound to make any investigation into the facts or matters stated in a resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security,
or other paper or document supplied by Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any action
~,r, taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties hereunder
,,,,,~ either directly or by or through agents or attorneys of the Bank.
SECTION 5.03. RECITALS OF ISSUER. The recitals contained herein with respect to the Issuer
,,,,, and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or
any other Person for any amount due on any Security from its own funds.
~„ SECTION 5.04. MAY HOLD SECURITIES. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent/Registrar, or any other agent.
.~
SECTION 5.05. MONEY HELD BY BANK. The Bank shall deposit any moneys received from
the Issuer into an account to be held in a fiduciary capacity for the payment of the Securities,
,,,~ with such moneys in the account that exceed the deposit insurance, available to the Issuer, provided
6
0
by the Federal Deposit Insurance Corporation to be fully collateralized with securities or
obligations that are eligible under the laws of the State of Texas and to the extent practicable
under the laws of the United States of America to secure and be pledged as collateral for trust
.. accounts until the principal and interest on such securities have been presented for payment and paid
to the owner thereof. Payments made from such trust account shall be make by check drawn on
such trust account unless the owner of such Securities shall, at its own expense and risk, request
+~ such other medium of payment.
Funds held by the Bank hereunder need not be segregated from any other funds provided
appropriate accounts are maintained in the name and for the benefit of the Issuer.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the provisions of Title 6 of the Texas Property Code, any money deposited with
the Bank for the payment of the principal, premium, if any, or interest on any Security and
.. remaining unclaimed for three (3) years following the stated maturity, the Bank shall, except as
otherwise directed by the Issuer, upon Issuer order, return to the Issuer. The Holder of such
Security shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank
~,,, with respect to such money shall thereupon cease.
SECTION 5.06. INDEMNIFICATION. To the extent permitted by law, the Issuer agrees to
;~„ indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without
negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or liability
,~„ in connection with the exercise or performance of any of its powers or duties under this Agreement.
SECTION 5.07. INTERPLEADER. The Issuer and the Bank agree that the Bank may seek
,,,r adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the County in the State of Texas where
either the Bank maintains an office or the administrative offices of the Issuer is located, and agree
,,,,, that service of process by certified or registered mail, return receipt requested, to the address referred
to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank
further agree that the Bank has the right to file a Bill of Interpleader in any court of competent
,,,,,+ jurisdiction located in the State of Texas to determine the rights of any Person claiming any interest
herein.
SECTION 5.08. DEPOSITORY TRUST COMPANY SERVICES. It is hereby represented and
warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust
Company" services or equivalent depository trust services by other organizations, the Bank has the
~. capability and, to the extent within its control, will comply with the "Operational Arrangements,"
effective from time to time, which establishes requirements for securities to be eligible for such type
depository trust services, including, but not limited to, requirements for the timeliness of payments
,~ and funds availability, transfer turnaround time, and notification of redemptions and calls.
0
7
ARTICLE SIX
MISCELLANEOUS PROVISIONS
"" SECTION 6.01. AMENDMENT. This Agreement maybe amended only by an agreement in
writing signed by both of the parties hereto.
SECTION 6.02. ASSIGNMENT. This Agreement may not be assigned by either party without
the prior written consent of the other.
"'~' SECTION G.03. NOTICES. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the
Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on
~+ the signature page of this Agreement.
SECTION 6.04. EFFECT OF HEADINGS. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
SECTION 6.05. SUCCESSORS AND ASSIGNS. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
SECTION 6.06. SEVERABILITY. In case any provision herein shall be invalid, illegal, or
~+ unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
~+ SECTION 6.07. 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 6.08. ENTIRE AGREEMENT. This Agreement and the Ordinance constitute the
entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar
+~ and if any conflict exists between his Agreement and the Ordinance, the Ordinance shall govern.
SECTION 6.09. COUNTERPARTS. This Agreement may be executed in any number of
w. counterparts, each of which shall be deemed an original and all of which shall constitute one and the
same Agreement.
rr SECTION 6.10. TERMINATION. This Agreement will terminate on the date of final payment
of the principal of and interest on the Securities to the Holders thereof or may be earlier terminated
by either party upon 60 days written notice; provided, however, an early termination of this
~., Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has
been appointed by the Issuer and such appointment accepted and (b) notice has been given to the
Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore,
..~ the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement
shall not occur at any time which would disrupt, delay, or otherwise adversely affect the payment
of the Securities.
..
~•• Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the
Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force and
effect following the termination of this Agreement.
SECTION G.11. GOVERNING LAW. This Agreement shall be construed in accordance with
~. and governed by the laws of the State of Texas.
[The remainder of this page intentionally left blank)
0
..
.~
9
~-,
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
r.
BANK OF AMERICA, N.A.
10~
B ~~
Y
Title S K- ` v` l L L /~~~(.> 11 I) L`'`~"f
Address: 500 West 7th St. Unit 36
Fort Worth, TX 76102
CITY OF KENNEDALE, TEXAS
Y
Mayor
Address: 405 Municipal Drive
Kennedale, Texas 76060
[SIGNATURE PAGE TO PAYING AGENT/REGISTRARRGREEMENT]
..~
0
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0
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SCHEDULE A
Paying Agent/Registrar Fee Schedule
$-O- ANNUAL ADMINISTRATION FEE
rrr
..
""~ R-1
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INTEREST RATE
3.970%
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
REGISTERED OWNER:
.~.
r
PRINCIPAL AMOUNT:
PRINCIPAL
AMOUNT
$200,000
DATE OF DELI ~ ~s MATURITY DATE
Feb ~' ~ -~, February 15, 2008
~ ~~ America, N.A.
Two Hundred Thousand Dollars
ON THE MATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THEPRINCIPAL OFAND INTEREST ONthis Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
0
R-2
wr
INTEREST RATE
3.970%
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
REGISTERED OWNER:
0
0
PRINCIPAL AMOUNT:
PRINCIPAL
AMOUNT
$210,000
DATE OFD LI ~ =~~;~, MATURITY DATE
Fe ~~'1~ ~ '~ ' .. ' ~~ ~ February 15 2009
)) ~ i ) ~ '~
Bank of America, N.A.
Two Hundred Ten Thousand Dollars
ON THE MATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being. a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall beaz inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall beaz interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ONthis Bond aze payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying AgentlRegistraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registraz for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeazed on the last business day
Page 1 of 6
err
,~.
,~.
R-3 UNITED. STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $220,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFU ~G B~ATDS
SE ~`zIIQ'~1 i t ` .5
~ ,~ `,
~)! I ~ ~
INTEREST RATE DATE OF DELIVERY MATURITY DATE
3.970% February 15, 2007 February 15, 2010
REGISTERED OWNER: Bank ofAmerica, N.A.
PRINCIPAL AMOUNT: Two Hundred Twenty Thousand Dollars
ON THE MATURITYDATE specified above, the CITY OF KENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day yeaz of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall beaz interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall beaz inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond aze payable in lawful money of the
United States ofAmerica, without exchange or collection chazges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeazed on the last business day
Page 1 of 6
..
..
~.
R-4
INTEREST RATE
3.970%
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
REGISTERED OWNER:
PRINCIPAL AMOUNT:
PRINCIPAL
AMOUNT
$235,000
DATE OF DELIVERY _.._ MATURITY DATE
~~ruat3 ;rl~, ~(~ ~" Februazy 15, 2011
' l ~1 ~ 11 I ~ 1 ,..
~~ MBank o AmericaYNA.
.~ ,
Two Hundred Thirty Five Thousand Dollars
ON THE MATURITYDATE specified above, the CITY OF KENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day yeaz of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall beaz interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall beaz interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond aze payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registraz for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
"~" R-5
«w
REGISTERED OWNER:
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
..
INTEREST RATE
3.970%
SERIES 2007
DATL~'~F DEI.R~EI~Y
FeDr~trary 15 2007
Bank of America, N.A.
PRINCIPAL
AMOUNT
$240,000
MATURITY DATE
February 15, 2012
r.
~»
PRINCIPAL AMOUNT:
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARItANT
Two Hundred Forty Thousand Dollars
ON THE MATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying AgentlRegistrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
.~
0
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..
.~.
R-6 UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $250,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
S S3pQ'~ ~~~
~~'~
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INTEREST RATE DAT~ ~b~ bELIVERY MATURITY DATE
3.970% February 15, 2007 February 15, 2013
REGISTERED OWNER: Bank ofAmerica, N.A.
PRINCIPAL AMOUNT: Two Hundred Fifty Thousand Dollars
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ON THE MATURITYDATE specified above, the CITY OF KENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States ofAmerica, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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INTEREST RATE
3.970%
PRINCIPAL
AMOUNT
$260,000
Dr~~'E ~ DELIVERY MATURITY DATE
February 1 ~, 20U7 February 15, 2014
Bank ojAmerica, N.A.
Two Hundred Sixty Thousand Dollars
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
REGISTERED OWNER:
PRINCIPAL AMOUNT:
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ON THE MATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ONthis Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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R-8 UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $265,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
INTEREST RATE DA3~F H + LIVERY MATURITY DATE
3.970% F~ruary 15, 2007. February 15, 2015
REGISTERED OWNER: Bank ofAmerica, N.A.
PRINCIPAL AMOUNT: Two Hundred Sixty Five Thousand Dollars
ON THEMATURITYDATE specified above, the CITYOF%ENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registraz for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
INTEREST RATE
3.970%
REGISTERED OWNER:
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PRINCIPAL AMOUNT:
PRINCIPAL
AMOUNT
$280,000
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DAT ,~F DELIVERY MATURITY DATE
Ferry 15, 2007 February 15, 2016
Bank of America, N.A.
Two Hundred Eighty Thousand Dollars
ON THEMATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying AgentJRegistrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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R-10
INTEREST RATE
3.970%
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TA,RRANT
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
REGISTERED OWNER:
PRINCIPAL AMOUNT:
PRINCIPAL
AMOUNT
$295,000
D T F ~' VERY MATURITY DATE
~~ bruary 15 2007 February 15, 2017
Bank of America, N.A.
Two Hundred Ninety Five Thousand Dollars
ON THE MATURITYDATE specified above, the CITY OF KENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on 9r
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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R-11 UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $305,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
INTEREST RATE DAT ~ r'~ ,~-Y MATURITY DATE
3.970% Feb ~~3; ;~ ~p~1~ February 15, 2018
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REGISTERED OWNER: Bank ofAmerica, N.A.
PRINCIPAL AMOUNT: Three Hundred Five Thousand Dollars
ON THE MATURITYDATE specified above, the CITY OF KENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States ofAmerica, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
R-12
UNITED STATES OF AMERICA
STATE OF TEXAS
PRINCIPAL
AMOUNT
INTEREST RATE
3.970%
COUNTY OF TARRANT $320,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
DATE OF DELIVERY MATURITY DATE
February 15, 2007 February 15, 2019
REGISTERED OWNER: ';~ ~ ~~u,I~i Americd, N.A.
PRINCIPAL AMOUNT: Three Hundred Twenty Thousand Dollars
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ONTHEMATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall beaz interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ONthis Bond aze payable in lawful money of the
United States of America, without exchange or collection chazges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registraz for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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R-13
UNITED STATES OF AMERICA
STATE OF TEXAS
PRINCIPAL
AMOUNT
INTEREST RATE
3.970%
COUNTY OF TARRANT $330,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
DATE OF DELIVERY MATURITY DATE
February 15, 2007 February 15, 2020
REGISTERED OWNER: ~~ ,.~8~'n PfAmeraca,~;1~V.A.
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PRINCIPAL AMOUNT: ree Hundred Thirty Thousand Dollars
ON THEMATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day yeaz of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall beaz inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall beaz interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying AgentlRegistraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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R-14
INTEREST RATE
3.970%
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
REGISTERED OWNER:
PRINCIPAL AMOUNT:
PRINCIPAL
AMOUNT
$345,000
DATE OF DELIVERY MATURITY DATE
February 15, 2007 February 15, 2021
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Three Hundred Forty Five Thousand Dollars
ON THEMA7'URITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall beaz interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall beaz interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registraz for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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R-15 UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $195,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
INTEREST RATE DATE OF DELIVERY . , MATURITY DATE
3.970% Februarq 15, 2007 February 15 2022
REGISTERED OWNER: `~`~B k fAmerica, N.A.
PRINCIPAL AMOUNT: One Hundred Ninety Five Thousand Dollars
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ON THE MATURITYDATE specified above, the CITY OF KENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
Page 1 of 6
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R-16 UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $205,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
INTEREST RATE DATE OF DELIVERY MATURITY DATE
3.970% Februazy 15, 2007 February 15, 2023
REGISTERED OWNER: Ban. k ofAmerica, N.A.
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PRINCIPAL AMOUNT: 1~i'do Hundred Five Thousand Dollars
ONTHEMATURITYDATE specified above, the CITYOFKENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 15 thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall beaz interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond aze payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying AgentlRegistrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying AgentlRegistraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registraz for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeazed on the last business day
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R-17 UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $210,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2007
INTEREST RATE DATE OF DELIVERY MATURITY DATE
3.970% February 1:x,-2007 February 15, 2024
REGISTERED OWNER: ~,$~nk ofAnieri+ca, NA.
PRINCIPAL AMOUNT: Two Hundred Ten Thousand Dollars
ON THEMA7'URITYDATE specified above, the CITYOF%ENNEDALE, TEXAS (the
"City"), in Tarrant County, Texas, being a political subdivision and home-rule municipality of the
State of Texas, hereby promises to pay to the Registered Owner specified above, or registered
assigns (hereinafter called the "Registered Owner"), the Principal Amount specified above, and to
pay interest thereon (calculated on the basis of a 360-day year of twelve 30-day months) from the
Date of Delivery, as set forth above, at the Interest Rate per annum specified above, payable on
August 15, 2007, and semiannually on each February 15 and August 1 S thereafter to the Maturity
Date specified above, or the date of redemption prior to maturity; except that if this Bond is required
to be authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such Principal Amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear inter-
est from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for redemption prior to maturity, at the designated trust office of Bank of
America, N.A. (currently located in Fort Worth, Texas), which is the "Paying Agent/Registrar" for
this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registraz to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying AgentlRegistraz on, and payable solely from, funds of the City required
by the Ordinance authorizing the issuance of this Bond (the "Ordinance") to be on deposit with the
Paying Agent/Registraz for such purpose as hereinafter provided; and such check shall be sent by the
Paying Agent/Registraz by United States mail, first-class postage prepaid, on each such interest
payment date, to the Registered Owner hereof, at its address as it appeared on the last business day
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of the month next preceding each such date (the "Record Date") on the Registration Books kept by
the Paying Agent/Registrar, ashereinafter described. In the event of anon-payment of interest on
a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment
(a "Special Record Date") will be established by the Paying Agent/Registrar ifand when funds for
the payment of such interest have been received from the City. Notice of the Special Record Date
and of the scheduled payment date of the past due interest (the "Special Payment Date" which shall
be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special
Record Date by United States mail, first class, postage prepaid, to the address of each Registered
Owner appearing on the Registration Books of the Paying Agent/Registrar at the close of business
on the last business day next preceding the date of mailing of such notice. Any accrued interest due
upon the redemption of this Bond prior to maturity as provided herein shall be paid to the Registered
Owner upon presentation and surrender of this Bond for redemption and payment at the designated
corporate trust office of the Paying Agent/Registrar (unless the redemption date is a regularly
scheduled interest payment date, in which case accrued interest on such redeemed Bonds shall be
payable in the regular manner described above). The City covenants with the Registered Owner of
this Bond that on or before each principal payment date, interest payment date and accrued interest
payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest
and Sinking Fund" created by the Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying
Agent/Registrar is located are authorized by law or executive order to close, or the United States
Postal Service is not open for business, then the date for such payment shall be the next succeeding
day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close, or the United States Postal Service is not open for business; and payment on
such date shall have the same force and effect as if made on the original date payment was due.
THIS BOND is one of a series of Bonds dated as of February 1, 2007, authorized in
accordance with the Constitution and laws of the State of Texas in the aggregate principal amount
of $4,365,000 FOR THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S
OUTSTANDING COMBINATIONTAXAND REVENUE CERTIFICATES OFOBLIGATION,
SERIES 1998 AND TO PAY COSTS OF ISSUANCE.
ON ANY DATE, the Bonds of this series 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 the "Prepayment Fee", computed pursuant to Section 15 of the
Ordinance, if any, plus accrued interest to the date fixed for redemption.
AT LEAST 10 days prior to the date fixed for any optional redemption of the Bond or
portions thereof prior to maturity a written notice of such redemption shall be sent by the City by
United States mail, first-class postage prepaid, to the registered owner at its address as it appeared
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on the Registration Books on the day such notice of redemption is mailed; provided, however, that
the failure of the registered owner to receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption
of this Bond. By the date fixed for any such redemption, due provision shall be made for the
payment of the required redemption price for the Bond or portions thereof which are to be so
redeemed. If such written notice of redemption is sent and if due provision for such payment is
made, all as provided above, the Bond or portions thereof which are to be so redeemed thereby
automatically shall be treated as redeemed prior to its scheduled maturity, and shall not bear interest
after the date fixed for redemption, and shall not be regarded as being outstanding except for the
right of the registered owner to receive the redemption price from the City out of the funds provided
for such payment.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Ordinance, this Bond, may, at the request of the Registered Owner or the assignee or assignees
hereof, be assigned, transferred and exchanged for a like aggregate principal amount of fully
registered Bonds, without interest coupons, payable to the appropriate Registered Owner, assignee
or assignees, as the case maybe, having the same denomination or denominations in any integral
multiple of $5,000 as requested in writing by the appropriate Registered Owner, assignee or
assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among
other requirements for such assignment and transfer, this Bond must be presented and surrendered
to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this
Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees
in whose name or names this Bond or any such portion or portions hereof is or are to be registered.
The form of Assignment printed or endorsed on this Bond may be executed by the Registered Owner
to evidence the assignment hereof, but such method is not exclusive, and other instruments of
assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this
Bond or any portion or portions hereof from time to time by the Registered Owner. The Paying
AgentlRegistrar'sressonable standard or customary fees and charges for transferring and exchanging
any Bond or portion thereof shall be paid by the City, but any taxes or governmental charges required
to be paid with respect thereto shall be paid by the one requesting such assignment, transfer or
exchange as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar
shall not be required to make any such transfer or exchange during the period commencing with the
close of business on any Record Date and ending with the opening of business on the next following
principal or interest payment date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City, resigns,
or otherwise ceases to act as such, the City has covenanted in the Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be
mailed to the Registered Owners of the Bonds.
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IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; that this Bond is a
general obligation of the City, issued on the full faith and credit thereof; and that ad valorem taxes
sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
comes due, and as such principal matures, have been levied and ordered to be levied against all
taxable property in the City, and have been pledged for such payment, within the limits prescribed
by law, all as provided in the Ordinance authorizing the Bonds.
THE CITYaIso has reserved the right to amend the Ordinance as provided therein, and under
some (but not all) circumstances amendments thereto must be approved by the registered owners of
a majority in aggregate principal amount of the outstanding Bonds.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such terms and
provisions, acknowledges that the Ordinance is duly recorded and available for inspection in the
official minutes and records of the governing body of the City, and agrees that the terms and
provisions of this Bond and the Ordinance constitute a contract between each Registered Owner
hereof and the City.
IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the City, and countersigned with the manual or facsimile
signature of the City Secretary of the City, and the official seal of the City has been duly impressed,
or placed in facsimile, on this Bond.
Countersigned:
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City S ,City of Kennedale, Texas
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Ma , City of Kennedale, Texas
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COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
(COMPTROLLER'S SEAL)
Comptroller of Public Accounts
of the State of Texas
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described in the text of this Bond; and that this Bond has been issued in exchange for a certificate
of obligation or certificates of obligation, or a portion of a certificate of obligation or certificates of
obligation of a series which originally was approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts of the State of Texas.
Dated
BANK OF AMERICAS N.A.
FORT WORTH, TEXAS
Paying Agent/Registrar
By
Authorized Representative
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned Registered Owner of this Bond, or duly
authorized representative or attorney thereof, hereby sells, assigns and transfers this Bond and all
rights hereunder unto
(Assignee's Social Security or (Please print or typewrite Assignee's name and address,
Taxpayer Identification Number) including zip code)
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and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
+~ II Dated:
Signature Guaranteed:
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NOTICE: Signature(s) must be guaranteed by
a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Bond in everyparticular, without alteration or
enlargement or any change whatsoever.
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~ FEDERAL TAX CERTIFICATE
,,, 1. In General.
1.1. The undersigned is the Mayor of the City of Kennedale, Texas (the "Issuer").
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1.2. This Certificate is executed for the purpose of establishing the reasonable
expectations of the Issuer as to future events regarding the Issuer's General Obligation Refunding
Bonds, Series 2007 (the "Bonds"). The Bonds are being issued pursuant to an ordinance of the
Issuer (the "Ordinance") adopted on the date of sale of the Bonds. The Ordinance is incorporated
herein by reference.
'~" 1.3. To the best ofthe undersigned's knowledge, information and belief, the expectations
contained in this Certificate are reasonable.
""' 1.4. The undersigned is an officer of the Issuer delegated with the responsibility, among
others, of issuing and delivering the Bonds.
""' 1.5. The undersigned is not aware of any facts or circumstances that would cause him
to question the accuracy of the representations made by Bank of America, N.A. (the "Purchaser")
in Section 3 of this Certificate.
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2. The Purpose of the Bonds and Useful Lives of Proiects.
,,.,~ 2.1. The purpose for the issuance of the Bonds, as more fully described in the Ordinance,
is to currently refund the Issuer's Combination Tax and Revenue Certificates of Obligation, Series
1998 (the "Outstanding Bonds") and to pay the related expenses of issuing the Bonds. The proceeds
of the Bonds will be used to redeem the Outstanding Bonds within 90 days of the date hereof.
2.2. The proceeds of the Outstanding Bonds were used for the construction a new
municipal complex and the acquisition of land therefor; the improvement of streets in the Issuer; and
the improvement of the Issuer's water system, including a new water well, new ground and elevated
water storage facilities and water lines (the "Outstanding Projects"). The Outstanding Projects
remain in service and have not been sold or otherwise disposed of by the Issuer.
2.3. The Issuer expects that 120 percent of the aggregate useful lives of the Outstanding
Projects, on the later of the date that such Outstanding Projects were placed in service or the date
'~" of issuance of the Outstanding Bonds, will exceed 30 years.
2.4. Other than members of the general public, the Issuer expects that throughout the
+~ lesser of the term of the Bonds, or the useful lives of the Outstanding Projects, the only user of the
Outstanding Projects will be the Issuer or the Issuer's employees and agents (other than a manager
or lessee). The Issuer will be the manager of the Outstanding Projects. The Issuer does not expect
~- to enter into long-term sales of output from the Outstanding Projects, except on the basis of
generally-applicable and uniformly applied rates. The Issuer may apply different rates for different
classes of customers, including volume purchasers, which are reasonable and customary.
2.5. Except as stated below, the Issuer expects not to sell or otherwise dispose of
property constituting the Outstanding Projects prior to the earlier of the end of such property's useful
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~.- life or the final maturity of the Bonds. The Ordinance provides that the Issuer will not sell or
otherwise dispose of the Outstanding Projects unless the Issuer receives an opinion of nationally-
recognizedbond counsel that such sale or other disposition will not adversely affect the tax-exempt
,,,~ status of the Bonds.
2.6. For purposes of Section 2.5 hereof, the Issuer has not included the portion of the
,,~ Outstanding Proj ects comprised of personal property that is disposed in the ordinary course at a price
that is expected to be less than 25 percent of the original purchase price. The Issuer, upon any
disposition of such property, wil? transfer the receipts from the disposition of such property to the
general operating fund and expend such receipts within six months for other governmental programs.
3. Yield.
~r All of the Bonds have been the subject of a bona fide initial offering to the Purchaser who
is acquiring as a member of the public and not for the present purposes of resale at a purchase price
of 100 percent of the stated principal amount thereof.
4. Transferred Proceeds and Disposition Proceeds.
'~ As of the date of this Certificate, all of the amounts received from the sale of the
Outstanding Bonds and the investment earnings thereon have been expended.
+~ 5. Interest and Sinking Fund.
5.1. A separate and special Interest and Sinking Fund has been created and established
„~ solely to pay the principal of and interest on the Bonds, with a portion of the Interest and Sinking
Fund constituting a bona fide debt service fund for the Bonds, and money deposited into the Interest
and Sinking Fund for the Bonds will not be invested at a yield higher than the yield on the Bonds,
,~ except during the thirteen month period beginning on the date of each such deposit of money, and
the amounts received from the investment of money in the Interest and Sinking Fund will not be
invested at a yield higher than the yield on the Bonds, except during the one year period beginning
W. on the date of receipt of such amounts; provided, however, and except that, if any money so
deposited, and any amounts received from the investment thereof, are accumulated in the Interest
and Sinking Fund and remain on hand in the Interest and Sinking Fund after thirteen months from
the date of deposit of any such money or one year after the receipt of any such amounts from the
~"' investment thereof, such money and amounts, to the extent of an aggregate not exceeding the lesser
of five percent of the proceeds of the Bonds or $100,000 will not be subject to investment yield
restrictions, and shall constitute a separate portion of the Interest and Sinking Fund.
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5.2. It is expected that a portion of the Interest and Sinking Fund will be used primarily
to achieve a proper matching of revenues collected for the Bonds and debt service on the Bonds
+~ within each bond year, and it is expected that such portion of the Interest and Sinking Fund will be
depleted once ayear on afirst-in -first-out basis, except for a possible carryover amount which will
not exceed the greater of one year's earnings on such fund or 1/12 of annual debt service payable
~. from such fund, but any money and amounts which maybe accumulated in the Interest and Sinking
Fund, to constitute a debt service reserve fund for the Bonds as described in Section 5.1, above, shall
constitute a separate portion of the Interest and Sinking Fund, and will not be depleted annually, and
,,,,,,, will not be subject to yield restrictions; provided that in no event will such debt service reserve fund
portion of the Interest and Sinking Fund ever exceed the lesser of five percent of the proceeds of the
Bonds or $100,000.
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6. Invested Sinkine Fund Proceeds Replacement Proceeds.
6.1. The Issuer has, in addition to the moneys received from the sale of the Bonds,
certain other moneys that are invested in various funds which are pledged for various purposes.
These other funds are not available to accomplish the purposes described in Section 2 of this
,~„ Certificate.
6.2. Other than the Interest and Sinking Fund, there are, and will be, no other funds or
~, accounts established, or to be established, by or on behalf of the Issuer (a) which are reasonably
expected to be used, or to generate earnings to be used, to pay debt service on the Bonds, or (b)
which are reserved or pledged as collateral for payment of debt service on the Bonds and for which
there is reasonable assurance that amounts therein will be available to pay such debt service if the
~ Issuer encounters financial difficulties. Accordingly, there are no other amounts constituting "gross
proceeds" of the Bonds, within the meaning of section 148 of the Internal Revenue Code of 1986
(the "Code").
7. Other Oblieations.
"~" There are no other obligations of the Issuer, other than the Issuer's Combination Tax and
Revenue Certificates of Obligations Series 2007, that (a) are sold at substantially the same time as
the Bonds, i.e., within 15 days of the date of sale of the Bonds, (b) are sold pursuant to a common
+~ plan of financing with the Bonds, and (c) will be payable from the same source of funds as the
Bonds.
8. Federal Tax Audit Responsibilities.
The Issuer ackrnowledges that in the event of an examination by the Internal Revenue Service
~,,, (the "Service") to determine compliance of the Bonds with the provisions of the Code as they relate
to tax-exempt obligations, the Issuer will respond, and will direct its agents and assigns to respond,
in a commercially reasonable manner to any inquiries from the Service in connection with such an
examination. The Issuer understands and agrees that the examination may be subject to public
disclosure under applicable Texas law.
9. Record Retention.
The Issuer has covenanted in the Ordinance that it will comply with the requirements of the
Code relating to the exclusion of the interest on the Bonds under section 103 of the Code. The
'""' Service has determined that certain materials, records and information should be retained by the
issuers of tax-exempt obligations for the purpose of enabling the Service to confirm the exclusion
of the interest on such obligations under section 103 of the Code. ACCORDINGLY, THE
~"' ISSUER SHALL TAKE STEPS TO ENSURE THAT ALL MATERIALS, RECORDS AND
INFORMATION NECESSARY TO CONFIRM THE EXCLUSION OF THE INTEREST ON
THE BONDS UNDER SECTION 103 OF THE CODE ARE RETAINED FOR THE PERIOD
r~r BEGINNING ON THE ISSUE DATE OF THE OUTSTANDING BONDS AND ENDING
THREE YEARS AFTER TAE DATE THE BONDS ARE RETIRED, The Issuer acknowledges
receipt of the letter attached hereto as Exhibit "B" which, in part, discusses specific guidance by the
.. Service with respect to the retention of records relating to tax-exempt bond transactions. The Issuer
also acknowledges that letter does not constitute an opinion of Bond Counsel as to the proper record
retention policy applicable to any specific transaction.
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10. Rebate to United States.
,~„ The Issuer has covenanted in the Ordinance that it will comply with the requirements of the
Code, including section 148(f) of the Code, relating to the required rebate to the United States.
Specifically, the Issuer will take steps to ensure that all earnings on gross proceeds of the Bonds in
~. excess of the yield on the Bonds required to be rebated to the United States will be timely paid to
the United States. The Issuer acknowledges receipt of the memorandum attached hereto as Exhibit
"A" which discusses regulations promulgated pursuant to section 148(f) of the Code. This
rr memorandum does not constitute an opinion of Bond Counsel as to the proper federal tax or
accounting treatment of any specific transaction.
~" [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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DATED:
DEB 1 5 2007
CITY OF KENNEDALE, TEXAS
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By:
Mayor
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The undersigned represents that, to the best of the undersigned's knowledge, information and
belief, the representations contained in Section 3 of this Federal Tax Certificate are accurate.
BANK OF AMERICA, N.A.
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By:
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Exhibit "A"
L/lW OFFICES
M_cCALL , PARKHURST & NORTON L.L.P.
900 CONGRESS AVENUE 717 NORTH HARWOOD
rr 700 N. gT. MARYS STREET
1250 ONE AMERICAN CENTER NINTH FLOOR
152b ONE RNERWALK PLACE
AUSTIN. TEXAS 7g07~g21d OALIAS, TEXAS 7d201,i6p 3AN ANTONIO, TEXAS 7d20d.1dOg
7ELEPMONE: (612)17d-0806
WW FACSIMILE (612] 172-0d71 TELEPHONE R14 764i20p TELEPHONE: R10) 226-2dOp
FACSIMILE (211) 751-0260
FACSNpLE R10) 226-2y61
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January 1, 2006
ARBITRAGE REBATE REGULATIONS~-
The arbitrage rebate requirements set forth in section 148(f) of the Internal Revenue
Code of 1986 (the "Code") generally provide that in order for interest on any issue of bonds'
y.l to be excluded from gross income (i.e., tax-exempt) the issuer must rebate to the United States
the sum of, (1) the excess of the amount eamed on all "nonpurpose investments" acquired with
"gross proceeds" of the issue over the amount which would have been eamed if such
,,, investments had been invested at a yield equal to the yield on the issue, and (2) the earnings
on such excess earnings.
~. On June 18, 1993, the U.S. Treasury Department promulgated regulations relating to
the computation of arbitrage rebate and the rebate exceptions. These regulations, which
replace the previously-published regulations promulgated on May 15, 1989, and on May 18,
1992, are effective for bonds issued after June 30, 1993. This memorandum was prepared by
~" McCall, Parkhurst & Horton L.L.P. and provides a general discussion of these arbitrage rebate
regulations. This memorandum does not otherwise discuss the general arbitrage regulations,
other than as they may incidentally relate to rebate. This memorandum also does not attempt
I~ to provide an exhaustive discussion of the arbitrage rebate regulations and should not be
considered advice with respect to the arbitrage rebate requirements as applied to any individual
or governmental unit or any specific transaction. Any tax advice contained in this memorandum
~„ is of a general nature and is not intended to be used, and should not be used, by any person to
avoid penalties under the Code.
McCall, Parkhurst 81 Horton L.L.P. remains available to provide legal advice to issuers
"' with respect to the provisions of these tax regulations but recommends that issuers seek
competent financial and accounting assistance in calculating the amount of such issuer's rebate
liability under section 148(f) of the Code and in making elections to apply the rebate exceptions.
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L In this memorandum the word "bond" is defined to include any bond, note,
certificate, financing lease or other obligation of an issuer.
Copyright 2006 by Harold T. Flanagan, McCall, Parkhurst & Horton L.L.P. All rights reserved.
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Effective Dates
„~„ The regulations promulgated on June 18,1993, generally apply to bonds delivered after
June 30, 1993, although they do permit an issuer to elect to apply the rules to bonds issued
prior to that date. The temporary regulations adopted by the U.S. Treasury Department in 1989
and 1992 incorporated the same effective dates which generally apply for purposes of section
'~` 148(f) of the Code. As such, the previous versions of the rebate regulations generally applied
to bonds issued between August 1986 and June 30,1993 (or, with an election, to bonds issued
prior to August 15, 1993). The statutory provisions of section 148(f) of the Code, other than
'~"' the exception for construction issues, a
pply to all bonds issued after August 15, 1986, (for
private activity bonds) and August 31, 1986, (for governmental public purpose bonds). The
statutory exception to rebate applicable for construction issues generally applies if such issue
~++ is delivered after December 19, 1989.
The regulations provide numerous transitional rules for bonds sold prior to July 1,1993.
„~ Moreover, since, under prior law, rules were previously published with respect to industrial
development bonds and mortgage revenue bonds, the transitional rules contained in these
regulations permit an issuer to elect to apply certain of these rules for computing rebate onpre-
,~ 1986 bonds. The regulations provide for numerous elections which would permit an issuer to
apply the rules (other than 18-month spending exception) to bonds which were issued prior to
July 1, 1993 and remain outstanding on June 30, 1993. Due to the complexity of the
regulations, it is impossible to discuss in this memorandum all circumstances for which specific
" elections are provided. If an issuer prefers to use these final version of rebate regulations in lieu
of the computational method stated under prior law (e.g., due to prior redemption) or the
regulations, please contact McCall, Parkhurst 8 Horton L.L.P. for advice as to the availability
~' of such options.
Future Value Computation Method
' The regulations employ an actuarial method for computing the rebate amount based on
the future value of the investment receipts (i.e., earnings) and payments. The rebate method
,r, employs atwo-step computation to determine the amount of the rebate payment. First, the
issuer determines the bond yield. Second, the issuer determines the arbitrage rebate amount.
The regulations require that the computations be made at the end of each five-year period and
upon final maturity of the issue (the "computation dates"). THE FINAL MATURITY DATE WILL
"~ ACCELERATE IN CIRCUMSTANCES IN WHICH THE BONDS ARE OPTIONALLY
REDEEMED PRIOR TO MATURITY. AS SUCH, IF BONDS ARE REFUNDED OR
OTHERWISE REDEEMED, THE REBATE MAY BE DUE EARLIER THAN INITIALLY
`"" PROJECTED. In order to accommodate accurate record-keeping and to assure that sufficient
amounts wilt be available for the payment of arbitrage rebate liability, however, we recommend
that the computations be performed at least annually. Please refer to other materials provided
*~ by McCall, Parkhurst 8 Horton L.L.P. relating to federal tax rules regarding record retention.
Under the future value method, the amount of rebate is determined by compounding the
aggregate earnings on all the investments from the date of receipt by the issuer to the
computation date. Similarly, a payment for an investment is future valued from the date that
the payment is made to the computation date. The receipts and payments are future valued
at a discount rate equal to the yield on the bonds. The rebatabte arbitrage, as of any
McCall, Parkhurst S Horton L.L.P. -Page 2
rr
0
computation date, is equal to the excess of the (1) future value of all receipts from investments
(i.e., earnings), over (2) the future value of all payments.
The following example is provided in the regulations to illustrate how arbitrage rebate
is computed under the future value method for a fixed-yield bond:
"~ "On January 1, 1994, City A issues a fixed yield issue and invests all the sale
proceeds of the issue ($49 million). There are no other gross proceeds. The
issue has a yield of 7.0000 percent per year compounded semiannually
~"' (computed on a 30 day month/360 day year basis). City A receives amounts
from the investment and immediately expends them for the governmental
purpose of the issue as follows:
Date Amount
2/1/1994 $ 3,000,000
"~ 4/1/1994 5,000,000
6/1/1994 14,000,000
9/1/1994 20,000,000
7/1/1995 10,000,000
City A selects a bond year ending on January 1, and thus the first required
~ computation date is January 1, 1999. The rebate amount as of this date is
computed by determining the future value of the receipts and the payments for
the investment. The compounding interval is each 6-month (or shorter) period
;., and the 30 day month/360 day year basis is used because these conventions
were used to compute yield on the issue. The future value of these amounts,
plus the computation credit, as of January 1, 1999, is:
Da a Receipts (Payments) FY (7.pppp percent)
01/1/1994 ($49,000,000) ($69,119,339)
~" 02/1/1994 3,000,000 4,207,602
04/1/1994 5,000,000 6,932,715
06/1/1994 14,000,000 19,190,277
09/1 /1994 20, 000, 000 26,947,162
01/1/1995 (1,000) (1,317)
07/1 /1995 10,000,000 12, 722, 793
,~„ 01/1/1996 (1,000) _ (1.229)
Rebate amount (01/01/1999) X878 6~~~
~~
General Method for Computing Yield on Bonds
In general, the term "yield," with respect to a bond, means the discount rate that when
used in computing the present value of all unconditionally due payments of principal and
interest and all of the payments for a qualified guarantee produces an amount equal to the
issue price of the bond. The term "issue price" has the same meaning as provided in sections
McCali, Parkhurst >i< Horton L.L.P. -Page 3
1273 and 1274 of the Code. That is, if bonds are publicly offered (i.e., sold by the issuer to a
bond house, broker or similar person acting in the capacity of underwriter or wholesaler), the
„~, issue price of each bond is determined on the basis of the initial offering price to the public (not
to the aforementioned intermediaries) at which price a substantial amount of such bond was
sold to the public (not to the aforementioned intermediaries). The "issue price" is separately
determined for each bond (i.e., maturity) comprising an issue.
..
The regulations also provide varying periods for computing yield on the bonds
depending on the method by which the interest payment is determined. Thus, for example,
"' yield on an issue of bonds sold with variable interest rates (i.e., interest rates which are reset
periodically based on changes in market) is computed separatelyforeach annual period ending
on the first anniversary of the delivery date that the issue is outstanding. In effect, yield on a
+~ variable yield issue is determined on each computation date by "looking back" at the interest
payments for such period. The regulations, however, permit an issuer of avariable-yield issue
to elect to compute the yield for annual periods ending on any date in order to permit a
~,. matching of such yield to the expenditure of the proceeds. Any such election must be made
in writing, is irrevocable, and must be made no later than the earlier of (1) the fifth anniversary
date, or (2) the final maturity date.
rrr
Yield on a fixed interest rate issue (i.e., an issue of bonds the interest rate on which is
determined as of the date of the issue) is computed over the entire term of the issue. Issuers
of fixed-yield issues generally use the yield computed as of the date of issue for all rebate
'""` computations. Such yield on fixed-yield issues generally is recomputed only if (1) the issue is
sold at a substantial premium, maybe retired within five years of the date of delivery, and such
date is earlier than its scheduled maturity date, or (2j the issue is astepped-coupon bond. In
+~ such cases, the regulations require the issuer to recompute the yield on such issues by taking
into account the early retirement value of the bonds. Similarly. recomputation may occur in
circumstances in which the Issuer or bondholder modify orwaive certain terms of, or rights with
~, respect to, the issue or in sophistica#ed hedging transactions. IN SUCH CIRCUMSTANCES
ISSUERS ARE ADVISED TO CONSULT McCALL PAR HURST 8 NORTON L L P TO
ADDRESS THEFEDERAL INCOME TAX CONSE UENCES OFTHE T NSAC77 NS.
,~
For purposes of determining the principal or redemption payments on a bond, different
rules are used for fixed-rate and variable-rate bonds. The payment is computed separately on
each maturity of bonds rather than on the issue as a whole. In certain circumstances, the yield
`~ on the bond is determined by assuming that principal on the bond is
the bond is retired on the final maturity date for the stated retirement price. Forbonds subject
to early redemption or stepped-coupon bonds, described above, or for bonds subject to
~"' mandatory early redemption, the yield is computed assuming the bonds are paid on the early
redemption date for an amount equal to their value.
~. Premiums paid to guarantee the payment of debt service on bonds are taken into
account in computing the yield on the bond. Payments for guarantees are taken into account
by treating such premiums as the payment of interest on the bonds. This treatment, in effect,
„~ raises the yield on the bond, thereby permitting the issuer to recover such fee with excess
earnings.
«~ McCail, Parkhurst 8 Horton L.L.P. -Page 4
r
The guarantee must be an unconditional obligation of the guarantor enforceable by the
bondholder for the payment of principal or interest on the bond or the tender price of a tender
,., bond. The guarantee may be in the form of an insurance policy, surety bond, irrevocable letter
or line of credit, or standby purchase agreement. Importantly, the guarantor must be legally
entitled to full reimbursement for any payment made on the guarantee either immediately or
upon commercially reasonable repayment terms. The guarantor may not be a co-obligor of the
bonds or a user of more than 10 percent of the proceeds of the bonds.
Payments for the guarantee may not exceed a reasonable charge for the transfer of
"""' credit risk. This reasonable charge requirement is not satisfied unless lt is reasonably expected
that the guarantee will result in a net present value savings on the bond (i.e., the premium does
not exceed the present value of the interest savings resulting by virtue of the guarantee). If the
guarantee is entered into after June 14, 1989, then any fees charged for the nonguarantee
services must be separately stated or the guarantee fee is not recoverable.
.r. The regulations also treat certain "hedging" transactions in a manner similarto qualified
guarantees. "Hedges" are contracts, e.g., interest rate swaps, futures contracts or options,
which are intended to reduce the risk of interest rate fluctuations. Hedges and other financial
~,,, derivatives are sophisticated and ever-evolving financial products with which a memorandum,
such as this, can not readily deal. !N SUCH CIRCUMSTANCES ISSUERS ARE ADVISED
TO CONSULT McCALL PARKHURST 8 NORTON L L P TO ADDRESS THE FEDERAL
INCOME TAX CONSEQUENCES OF THESE TRANSACTIONS
~.
Earnings on Nonpurnose Investments
""' The arbitrage rebate provisions apply only to the receipts from the investment of "gross
proceeds" in "nonpurpose investments." For this purpose, nonpurpose investments are stock,
bonds or other obligations acquired with the gross proceeds of the bonds for the period prior
to the expenditure of the gross proceeds for the ultimate purpose. For example, investments
deposited to construction funds, reserve funds (including surplus taxes or revenues deposited
to sinking funds) or other similar funds are nonpurpose investments. Such investments include
,.,. only those which are acquired with "gross proceeds." For this purpose, the term "gross
proceeds" includes original proceeds received from the sale of the bonds, investment earnings
from the investment of such original proceeds, amounts pledged to the payment of debt service
on the bonds or amounts actuaAy used to pay debt service on the bonds. The regulations do
not provide a sufficient amount of guidance to include an exhaustive list of "gross proceeds"
for this purpose; however, it can be assumed that "gross proceeds" represent all amounts
received from the sale of bonds, amounts earned as a result of such sale or amounts (including
"""' taxes and revenues) which are used to pay, or secure the payment of, debt service for the
bonds. The total amount of "gross proceeds" allocated to a bond generally can not exceed the
outstanding principal amount of the bonds.
The regulations provide that an investment is allocated to an issue for the period (1)
that begins on the date gross proceeds are used to acquire the investment, and (2) that ends
;,,,. on the date such investment ceases to be allocated to the issue. In general, proceeds are
allocated to a bond issue until expended for the ultimate purpose for which the bond was issued
or for which such proceeds are received (e.g., construction of abond-financed facility or
,,,c, payment of debt service on the bonds). Deposit of gross proceeds to the general fund of the
McCall, Parkhurst 8 Horton L.L.P. -Page 5
~.
...
issuer (or other fund in which they are commingled with revenues or taxes) does not eliminate
or ameliorate the Issuer's obligation to compute rebate in most cases. As such, proceeds
.~.~ commingled with the general revenues of the issuer are not "freed-up" from the rebate
obligation. An exception to this commingling limitation for bonds, other than private activity
bonds, permits "investment eamings" (but not sale proceeds or other types of gross proceeds)
,,,,, to be considered spent when deposited to a commingled fund if those amounts are reasonably
expected to be spent within six months. Other than for these amounts, issuers may consider
segregating investments in order to more easily compute the amount of such arbitrage earnings
by not having to allocate investments.
Special rules are provided for purposes of advance refundings. These rules are too
complex to discuss in this memorandum. Essentially, the rules relating to refundings, however,
""` do not require that amounts deposited to the escrow fund to defease the prior obligations of the
issuer be subject to arbitrage rebate to the extent that the investments deposited to the escrow
fund do not have a yield in excess of the yield on the bonds. Any loss resulting from the
.~ investment of proceeds in an escrow fund below the yield on the bonds, however, may be
recovered by combining those investments with investments deposited to other funds, e.g.,
reserve or construction funds.
The arbitrage regulations also provide an exception to the arbitrage limitations for the
investment of bond proceeds in tax-exempt obligations. As such, investment of proceeds in
W. tax exempt bonds eliminates the Issuer's rebate obligation. A caveat; this exception does not
apply to gross proceeds derived allocable to a bond, which is not subject to the altemative
minimum tax under section 57(a)(5) of the Code, if invested in tax-exempt bonds subject to the
altemative minimum tax, i.e., "private activity bonds." Such "AMT-subject" investment is treated
"""' as a taxable investment and must comply with the arbitrage rules, including rebate. Earnings
from these tax-exempt investments are subject to arbitrage restrictions, including rebate.
.. Similarly, the investment of gross proceeds in certain tax-exempt mutual funds are
treated as a direct investment in the tax-exempt obligations deposited in such fund. While
issuers may invest in such funds for purposes of avoiding arbitrage rebate, they should be
„~ aware that if "private activity bonds" are included in the fund then a portion of the earnings will
be subject to arbitrage rebate. Issuers should be prudent in assuring that the funds do not
contain private activity bonds.
The arbitrage regulations provide a number of instances in which eamings will be
imputed to nonpurpose investments. Receipts generally will be imputed to investments that
do not bear interest at an arm's-length (i.e., market) interest rate. As such, the regulations
"""' adopt a "market price" rule. In effect, this rule prohibits an issuerfrom investing bond proceeds
in investments at a price which is higher than the market price of comparable obligations, in
order to reduce the yield. Special rules are included for determining the market price for
~. investment contracts, certificates of deposit and certain U.S. Treasury obligations. For
example, to establish the fair market value of investment contracts a bidding process between
three qualified bidders must be used. The fair market value of certificates of deposit which bear
a fixed interest rate and are subject to an early withdrawal penalty is its purchase price if that
price is not less than the yield on comparable U.S. Treasury obligations and is the highest yield
available from the institution. In any event, a basic "common sense" rule-of-thumb that can be
,,,,,, used to determine whether a fair market value has been paid is to ask whether the general
-"' McCall, Parkhurst 8 Horton L.L.P. -Page 6
,w.
n.
funds of the issuer would be invested at the same yield or at a higher yield. An exception to
this market price rule is available for United States Treasury Obligations -State or Local
,~„ Government Series in which case the purchase price is always the market price.
Reimbursement and Working Capital
The regulations provide rules for purposes of determining whether gross proceeds are
used for working capital and, if so, at what times those proceeds are considered spent. In
general, working capital financings are subject to many of the same rules that have existed
""' since the mid-1970x. For example, the regulations generally continue the 13-month temporary
period. By adopting a "proceeds-spent-last" rule, the regulations also generally require that an
issuer actually incur a deficit (i.e., expenditures must exceed receipts) for the computation
~" period (which generally corresponds to the issuer's fiscal year). Also. the regulations continue
to permit an operating reserve, but unlike prior regulations the amount of such reserve may not
exceed five percent of the issuer's actual working capital expenditures for the prior fiscal year.
~. Another change made by the regulations is that the issuer may not finance the operating
reserve with proceeds of atax-exempt obligation.
,,; Importantly, the regulations contain rules for determining whether proceeds used to
reimburse an issuer for costs paid prior to the date of issue of the obligation, in fact, are
considered spent at the time of reimbursement. These rules apply to an issuer who uses
general revenues for the payment of all or a portion of the costs of a project then uses the
proceeds of the bonds to reimburse those general revenues. Failure to comply with these rules
would result in the proceeds continuing to be subject to federal income tax restrictions,
including rebate.
~.
To qualify for reimbursement, a cost must be described in an expression (e.g.,
resolution, legislative authorization) evidencing the issuers intent to reimburse which is made
~•• no later than 60 days after the payment of the cost. Reimbursement must occur no later than
18 months after the later of (1) the date the cost is paid or (2) the date the project is placed in
service. Except for projects requiring an extended construction period or small issuers, in no
,;,,,,, event can a cost be reimbursed more than three years after the cost is paid.
Reimbursement generally is not permitted forworking capital; only capital costs, grants
and loans may be reimbursed. Moreover, certain anti-abuse rules apply to prevent issuers from
'~ avoiding the limitations on refundings. IN CASES INVOLVING WORKING CAPITAL OR
REIMBURSEMENT, ISSUERS ARE ADVISED TO CONTACT McCALL, PARKHURST &
HORTON L.L.P. TO ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES OF THE
"' TRANSACTION.
Rebate Payments
,..
Rebate payments generally are due 60 days after each installment computation date.
The interim computation dates occur each fifth anniversary of the issue date. The final
,,,,,, computation date is on the latest of (1) the date 60 days after the date the issue of bonds is no
longer outstanding, (2) the date eight months after the date of issue for certain short-term
obligations (i.e., obligations retired within three years), or (3) the date the issuer no longer
,~ reasonably expects any spending exception, discussed below, to apply to the issue. On such
McCall, Parkhurst ~ Horton L.L.P. -Page 7
wr
a.
payment dates, other than the final payment date, an issuer is required to pay 90 percent of
the rebatable arbitrage to the United States. On the final payment date, an issuer is required
,,,, to pay 100 percent of the remaining rebate liability.
Failure to timely pay rebate does not necessarily result in the loss of tax-exemption.
Late payments, however, are subject to the payment of interest, and unless waived, a penalty
.. of 50 percent (or, in the case of private activity bonds, other than qualified 501(c)(3) bonds, 100
percent) of the rebate amount which is due. IN SUCH CIRCUMSTANCES, ISSUERS ARE
ADVISED TO CONSULT McCALL, PARKHURST & NORTON L.L.P. TO ADDRESS THE
""" FEDERAL INCOME TAX CONSEQUENCES OF THESE TRANSACTIONS.
Rebate payments are refundable. The issuer, however, must establish to the
satisfaction of the Commissioner of the Internal Revenue Service that the issuer paid an
amount in excess of the rebate and that the recovery of the overpayment on that date would
not result in additional rebatable arbitrage. An overpayment of less than $5,000 may not be
«. recovered before the final computation date.
Alternative Penalty Amount
In certain cases, an issuer of a bond the proceeds of which are to be used for
construction may elect to pay a penalty, in lieu of rebate. The penalty may be elected in
circumstances in which the issuer expects to satisfy thetwo-year spending exception which is
more fully described under the heading "Exceptions to Rebate." The penalty is payable, if at
all, within 60 days after the end of each six-month period. This is more often than rebate. The
election of the alternative penalty amount would subject an issuer, which fails the twa-year
""' spend-out requirements, to the payment of a penalty equal to one and one-half of the excess
of the amount of proceeds which was required to be spent during that period over the amount
which was actually spent during the period.
The penalty has characteristics which distinguish it from arbitrage rebate. First, the
penalty would be payable without regard to whether any arbitrage profit is actually earned.
„~, Second, the penalty continues to accrue until either (1) the appropriate amount is expended or
(2) the issuer elects to terminate the penalty. To be able to terminate the penalty, the issuer
must meet specific requirements and, in some instances, must pay an additional penalty equal
to three percent of the unexpended proceeds.
Exceptions to Rebate
""' The Code and regulations provide certain exceptions to the requirement that the
excess investment earnings be rebated to the United States.
a. Small Issuers. The first exception provides that if an issuer (together with all
subordinate issuers) during a calendar yeardoes not issue tax-exempt bondsZ in an aggregate
~ For this purpose, "private activity bonds" neither are afforded the benefit of this
exception nor are taken into account for purposes of determining the amount of bonds
'"" issued.
""' McCall, Parkhurst 8 Horton L.L.P. -Page 8
face amount exceeding $5 million, then the obligations are not subject to rebate. Only issuers
with general taxing powers may take advantage of this exception. Subordinate issuers are
those issuers which derive their authority to issue bonds from the same issuer, e.g., a city and
a health facilities development corporation, or which are controlled by the same issuer, e.g.,
a state and the board of a public university. In the case of bonds issued for public school capital
expenditures, the $5 million cap may be increased to as much as $15 million. For purposes
""` of measuring whether bonds in the calendar year exceed these dollar limits, current refunding
bonds can be disregarded if they meet certain structural requirements. Please contact McCall,
Parkhurst & Horton L.L.P. for further information.
b. Spending Exceptions.
Six-Month Exception. The second exception to the rebate requirement is available to
all tax-exempt bands, all of the gross proceeds of which are expended during six months. The
six month rule is available to bonds issued after the effective date of the Tax Reform Act of
,~, 1986. See the discussion of effective dates on page two. For this purpose, proceeds used for
the redemption of bonds (other than proceeds of a refunding bond deposited to an escrow fund
to discharge refunded bonds) can not be taken into account as expended. As such, bonds with
excess gross proceeds generally can not satisfy the second exception unless the amount does
~` not exceed the lesser of five percent or $100,000 and such de minimis amount must be
expended within one year.
Certain gross proceeds are not subject to the spend-out requirement, including
amounts deposited to a bona fide debt service fund, to a reserve fund and amounts which
become gross proceeds received from purpose investments. These amounts themselves,
however, may be subject to rebate even though the originally expended proceeds were not.
The Code provides a special rule for tax and revenue anticipation notes (i.e., obligations issued
to pay operating expenses in anticipation of the receipt of taxes and other revenues). Such
,~,. notes are referred to as TRANs. To determine the timely expenditure of the proceeds of a
TRAN, the computation of the "cumulative cash flow deficit" is important. If the "cumulative
cash flow deficit" (i.e., the point at which the operating expenditures of the issuer on a
cumulative basis exceed the revenues of the issuer during the fiscal year) occurs within the first
six months of the date of issue and must be equal to at least 90 percent of the proceeds of the
TRAN, then the notes are deemed to satisfy the exception. This special rule requires, however,
that the deficit actually occur, not that the issuer merely have an expectation that the deficit will
"` occur. In lieu of the statutory exception for TRANS, the regulations also provide a second
exception. Under this exception,100 percent of the proceeds must be spent within six months,
but before note proceeds can be considered spent, all other available amounts of the issuer
*r must be spent first {"proceeds-spent-last" rule). In determining whether all available amounts
are spent, a reasonable working capital reserve equal to five percent of the prior year's
expenditures may be set aside and treated as unavailable.
~.
18-Month Exception. The regulations also establish anon-statutory exception to
arbitrage rebate ff all of the gross proceeds (including investment earnings) are expended within
18 months after the date of issue. Under this exception, l 5 percent of the gross proceeds must
be expended within asix-month spending period, 60 percent within a 12-month spending period
and 100 percent within an 18-month spending period. The rule permits an issuer to rely on its
reasonable expectations for computing investment earnings which are included as gross
McCall, Parkhurst 8 Horton L.L.P. -Page 9
.r
proceeds during the first and second spending period. A reasonable ntainage not to exceed
five percent of the sale proceeds of the issue is not required to be spent within the 18-month
~„ period but must be expended within 30 months. Rules similarto the six-month exception relate
to the definition of gross proceeds.
Two Year Exception. Bonds issued after December 19, 1989 (i.e., the effective date
of the Omnibus Reconciliation Act of 1989), at least 75 percent of the net proceeds of which
are to be used for construction, may be exempted from rebate if the gross proceeds are spent
within two years. Bonds more than 25 percent of the proceeds ofwhich are used for acquisition
~" or working capital may not take advantage of this exception. The exception applies only to
governmental bonds, qualified 501(c)(3) bonds and private activity bonds for governmentally-
owned airports and docks and wharves. The two-year exception requires that at least 10
percent of the available construction proceeds must be expended within six months after the
date of issue, 45 percent within 12 months, 75 percent within 18 months and 100 percent within
24 months. The term "available construction proceeds" generally means sad proceeds of the
bonds together with investment eamings less amounts deposited to a qualified reserve fund
or used to pay costs of issuance. Under this rule, a reasonable retainage not to exceed five
percent need not be spent within 24 months but must be spent within 36 months.
Thetwo-year rule also provides for numerous elections which must be made not later
than the date of issuance of the bonds. Once made, the elections are irrevocable. Certain
elections permit an issuer to bifurcate bond issues, thereby treating only a portion of the issue
~" as a qualified construction bond; and, permit an issuerto disregard eamings from reserve funds
for purposes of determining "available construction proceeds." Another election permits an
issuer to pay the alternative penalty amount discussed above in lieu of rebate if the issuer
ultimately fails to satisfy the two-year rule. Issuers should discuss these elections with their
financial advisors prior to issuance of the bonds. Of course, McCall, Parkhurst 8 Horton L.L.P.
remains available to assist you by providing legal interpretations thereof.
Debt Service Funds. Additionally, an exception to the rebate requirement, whether or
not any of the previously discussed exceptions are available, applies for eamings on "bona fide
~, debt service funds." A "bona fide debt service fund" is one in which the amounts are expended
within 13 months of the accumulation of such amounts by the issuer. In general, most interest
and sinking funds (other than any excess taxes or revenues accumulated therein) satisfy these
requirements. For private activity bonds, short term bonds (i.e., have a term of less than five
'"°"' years) or variable rate bonds, the exclusion is available only if the gross eamings in such fund
does not exceed $100,000, for the bond year. For other bonds issued after November 11,
1988, no limitation is applied to the gross eamings on such funds for purposes of this
exception. Therefore, subject to the foregoing discussion, the issuer is not required to take
such amounts into account for purposes of the computation.
.~ FOR BONDS ISSUED AFTER THE EFFECTIVE DATE OF THE TAX REFORM ACT OF 1986
WHICH WERE OUTSTANDING AS OF NOVEMBER 11, 1988, OTHER THAN PRIVATE
ACTIVITY BONDS, SHORT TERM BONDS OR VARIABLE RATE BONDS, AONE-TIME
,,.,.. ELECTION MAY BE MADE TO EXCLUDE EARNINGS ON "BONA FIDE DEBT SERVICE
FUNDS" WITHOUT REGARD TO THE $100,000, LIMITATION. THE ELECTION MUST BE
MADE IN WRITING (AND MAINTAINED AS PART OF THE ISSUER'S BOOKS AND
~.
a. McCall, Parkhurst & Horton L.L.P. -Page 10
RECORDS) NO LATER THAN THE LATER OF MARCH 21, 1990, OR THE FIRST DATE A
REBATE PAYMENT IS REQUIRED.
Conclusion
McCall, Parkhurst 8~ Horton L.L.P. hopes that this memorandum will prove to be useful
as a general guide to the arbitrage rebate requirements.
Again, this memorandum is not intended as an exhaustive discussion nor as specific
""' advice with respect to any specific transaction. We advise our clients to seek competent
financial and accounting assistance. Of course, we remain available to provide legal advice
regarding all federal income tax matters, including arbitrage rebate. If you have any questions,
.. please feel free to contact either Harold T. Flanagan or Faust N. Bowerman at (214) 754-9200.
«~
.~
.~ McCall, Parkhurst 8 Horton L.L.P. -Page 11
+rw
..
4Y~
Exhibit "B"
LAW OFFICES
M~CALL, PARKHURST & HORTON L.L.P.
600 CONGRESS AVENUE
1250 ONE AMERICAN CENTER
AUSTIN, TEXAS 78701-3248
TELEPHONE: (512) 47&3805
FACSIMILE: (512)472-0871
717 NORTH HARWOOD
NINTH FLOOR
DALLAS, TEXAS 75201.8587
TELEPHONE: (214) 754-9200
FACSIMILE: (214) 754-9250
700 N. ST. MARY'S STREET
1525 ONE RIVERWALK PLACE
SAN ANTONIO, TEXAS 78205.3503
TELEPHONE: (210) 225-2800
FACSIMILE: (210)225-2984
rrr
Mr. Mark White
Interim City Manager
,,., City of Kennedale
405 Municipal Drive
Kennedale, Texas 76060
February 8, 2007
Re: City of Kennedale, Texas
General Obligation Refunding Bonds, Series 2007
Dear Mr. White:
As you know, the City of Kennedale, Texas (the "Issuer")will issue the captioned bonds in order
"" to provide for the refunding of portions of bonds previously issued by the Issuer. As a result of that
issuance, the federal income tax laws impose certain restrictions on the investment and expenditure of
amounts to be used for the project or to be deposited to the interest and sinking fund for the captioned
~"' bonds. The purpose of this letter is to set forth, in somewhat less technical language, those provisions
of the tax law which require the timely use of bond proceeds and that investment of these amounts be
at a yield which is not higher than the yield on the captioned bonds. For this purpose, please refer to line
+~+ 20(f) of the Form 8038-G included in the transcript of proceedings for the yield on the captioned bonds.
Generally, the federal tax laws provide that, unless excepted, amounts to be deposited to the
,,,,, interest and sinking fund must be invested in obligations the combined yield on which does not exceed
the yield on the bonds. Importantly, for purposes of administrative convenience, the bonds, however,
have been structured in such a way as to avoid, for the most part, this restriction on investment yield.
,~„ They also contain certain covenants relating to expenditures of proceeds designed to alert you to
unintentional failures to comply with the laws affecting expenditures of proceeds and dispositions of
property.
~` First, the interest and sinking fund is made up of amounts which are received annually for the
payment of current debt service on all the Issuer's outstanding bonds. Any taxes or revenues deposited
to the interest and sinking fund which are to be used for the payment of current debt service on the
"~ captioned bonds, or any other outstanding bonds, are not subject to yield restriction. By definition,
current debt service refers only to debt service to be paid within one year of the date of receipt of these
amounts. For the most part, this would be debt service in the current fiscal year. These amounts
'"'" deposited to the account for can ent debt service may be invested without regard to any constraint
imposed by the federal income tax laws.
,,,. Second, a portion of the interest and sinking fund is permitted to be invested without regard to
yield restriction as a "minor portion." The "minor portion" exception is available for de minimis
amounts of taxes or revenues deposited to the interest and sinking fund. The maximum amount that may
,r~, be invested as part of this account may not exceed the lesser of five percent of the principal amount of
the bonds or $100,000.
~. Accordingly, you should review the current balance in the interest and sinking fund in order to
determine if such balance exceeds the aggregate amounts discussed above. Additionally, in the future
it is important that you be aware of these restrictions as additional amounts are deposited to the fund.
The amounts in the fund which are subject to yield restriction would only be the amounts which are in
"~ excess of, in the case of the interest and sinking fund, the sum of (1) the current debt service account and
(2) the "minor portion" account. Moreover, to the extent that additional bonds are issued by the Issuer,
whether for new money projects or for refunding, these amounts will change in their proportion.
r~
The Ordinance contains covenants that require the Issuer to comply with the requirements of the
federal tax laws relating to the tax-exempt obligations. The Internal Revenue Service (the "Service")has
'""' determined that certain materials, records and information should be retained by the issuers of tax-
exempt obligations for the purpose of enabling the Service to confirm the exclusion of the interest on
such obligations under the Internal Revenue Code. Accordingly, the Issuer should retain such
~ materials, records and information for the period beginning on the issue date of the outstanding
bonds and ending three years after the date the captioned bonds are retired. Please note this
federal tax law standard may vary from state law standards. The material, records and information
+.~ required to be retained will generally be contained in the transcript of proceedings for the captioned
bonds, however, the Issuer should collect and retain additional materials, records and information to
ensure the continued compliance with federal tax law requirements. For example, beyond the transcript
,~, of proceedings for the bonds, the Issuer should keep schedules evidencing the expenditure of bond
proceeds, documents relating to the use of bond-financed property by governmental and any private
parties (e.g., leases and management contracts, if any) and schedules pertaining to the investment ofbond
r proceeds. In the event that you have questions relating to record retention, please contact us.
Finally, you should notice that the Ordinance contains a covenant that limits the ability of the
Issuer to sell or otherwise dispose of bond-financed property for compensation. Beginning for
w~ obligations issued after May 15, 1997 (including certain refunding bonds), or in cases in which an issuer
elects to apply new private activity bond regulations, such sale or disposition causes the creation of a
class of proceeds referred to as "disposition proceeds." Disposition proceeds, like sale proceeds and
'"" investment earnings, are tax-restricted funds. Failure to appropriately account, invest or expend such
disposition proceeds would adversely affect the tax-exempt status of the bonds. In the event that you
anticipate selling property, even in the ordinary course, please contact us.
,~.
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Obviously, this letter only presents a fundamental discussion of the yield restriction rules as
applied to amounts deposited to the fund. Moreover, this letter does not address the rebate consequences
with respect to the interest and sinking fund. You should review the memorandum attached to the
,,,,~ Federal Tax Certificate as Exhibit "A" for this purpose. If you have certain concerns with respect to the
matters discussed in this letter or wish to ask additional questions with regards to certain limitations
imposed, please feel free to contact our finm. Thank you for your consideration and we look forward to
,,,,r our continued relationship.
Very truly yours,
cc: Mr. Noel Valdez
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McCALL, PARKHURST & HORTON L.L.P
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LAW OFFICES
M~CALL, PARKHURST & HORTON L.L.P.
....
600 CONGRESS AVENUE 717 NORTH HARWOOD 700 N. ST. MARY'S STREET
SUITE 1800 SUITE 900 SUITE 1525
~ AUSTIN, TEXAS 78 701-3248 DALLAS, TEXAS 75201-65 87 SAN ANTONIO, TEXAS 78205-3503
TELEPHONE: 512 478-3805 TELEPHONE: 214 754-9200 TELEPHONE: 210 225-2800
FACSIMILE: 512 472-0871 FACSIMILE: 214 754-9250 FACSIMILE: 210 225-2984
`~
May 14, 2007
,~, CERTIFIED MAIL RRR: 7004 2510 0007 2429 4489
Internal Revenue Service Center
,~,,, Ogden, Utah 84201
Re: Information Reporting -Tax-Exempt Bonds
„r,,, City of Kennedale, Texas
General Obligation Refunding Bonds, Series 2007
~- Ladies and Gentlemen:
Pursuant to the requirements of Section 149(e) of the Internal Revenue Code of 1986,
~' enclosed please find an original and a photocopy of Form 8038-G which is hereby submitted to you
for the above-captioned bonds issued February 15, 2007.
'~"' Please file the original and return the receipted copy of Form 8038-G to the undersigned in
the enclosed self-addressed, postage paid envelope.
Sincerely,
McCALL, PARKHURST & HORTON L.L.P.
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HTF: ved
;,,~ Enclosures
cc: Mr. Noel Valdez
~.
Harold T. Flanagan
,.r
Form $~3$-G Information Return for Tax•Exempt Governmental Obligations
- Under Internal Revenue Code section 149(e) OMB No. t5a5-0720
r (Rev. November 2000) - See separate Instructions.
Department of the Treasury
Internal Revenue Service Caution: If the issue price is under $100,000, use Form 8038-GC.
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1 Issuer's name
3
KENNEDALE, TEXAS (CITY OF)
Number and street (or P.O. box if mail is not delivered to street address)
405 MUNICIPAL DRIVE
If Amended Return, check here - [
2 Issuer's employer identification number
75 ; 6003070
Room/suite 4 Report number
301
6 Date of issue
07-1S-n7
rrtr 5 t;ity, town, or post office, state, and ZIP code
KENNEDALE, TEXAS 76060
ivanie ui issue 8 CUSIP number
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007 wnNrr
9
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Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative
MARK WHITE, INTERIM CITY MANAGER ( 817 J 478-5418
T e of Issue (check a ticable box(es) and enter the issue rice) See instructions and attach schPrli,la
11 ^ Education ,
12 ^ Health and hospital •
13 ^ Transportation ~ ~ ~ ~ ~ ~ '
14 ^ Public safety. ~ •
15 ^ Environment (including sewage bonds)
16 ^ Housing .
17 ^ Utilities ~ ~ ~ ~ ~ ~ _~
18 ®Other. Describe - REFONDING ~ ~ ~ ~ ~ ~ '
19 If obligations are TANs or RANs, check box - ^ If obligations are BANS, check box - ^
20 If obli ations are in the form of a lease or installment sale, check box - ^
181_ 4,365,000
Descrl tlon of Obli ations. Com lete for the entire issue for which this form is bein filed.
ors
(a) Final maturity date (b) Issue price (c) Stace at matuPitlon (d) weighted * e Yi
P y average maturity (1 eld
21 02-15-2024 $ 4 365 000 $ 4 365 000 9.260 ears 4.0280
tr Uses of Proceeds of Bond Issue (includin underwriters' discount)
22 Proceeds used for accrued interest 22 -0-
23 Issue price of entire issue (enter amount from line 21, column (b)) 23 4 0
rrr 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 52 262
25 Proceeds used for credit enhancement . 25 -0_
26 Proceeds allocated to reasonably required reserve or replacement fund 26 -0-
27 Proceeds used to currently refund prior issues e 27 4 312 738
wr 28 Proceeds used to advance refund prior issues 28
29 Total (add lines 24 through 28) , 2g 4,365,000
30 Nonrefundin roceeds of the issue (subtract line 29 from line 23 and enter amount here) ~ 30 -0-
Descri tion of Refunded Bonds (Com lete this art onl for refundin bonds.)
irtr 31, Enter the remaining weighted average maturity of the bonds to be currently refunded - 9.411 years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded - N/A years
33 Enter the last date on which the refunded bonds will be called _ - 02-15-07
~ 34 Enter the date(s) the refunded bonds were issued - 12-09-98
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 _p_
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
vrr issuer - and the date of the issue - . N/A
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 hed e, check box ~ ~ ~ ~ ~ - ^
'a` Under penalties of perjury, I declare that f 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 Clifford Blackwell
+^. ' 02-15-07 Director of Finance
Signature of i u s authorized representative 'Type or print name and title
For Paperwork Reduction Act Notice, see page 2 of the Instructions. cat. No. s3773s Form 8038-G (Rev. tt-zooo)
"W' ® 'Blended w/ Combination Tax 8, Revenue Certificates of Obligation, Series 2007.
M..
THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE
~..
We, the undersigned, hereby officially certify that we are the Mayor and City Secretary,
respectively, of the CITY OF KENNEDALE, TEXAS (the "City"), and we further certify as follows:
1. This certificate is given for the benefit of the Attorney General of the State of Texas
arr and all parties interested in the CITY OF I{ENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING
BONDS, SERIES 2007 (the "Bonds"), dated as of February 1, 2007, and authorized by an ordinance
„~ passed by the City Council of the City on January 11, 2007.
2. The City is a duly incorporated Home Rule City, having more than 5,000 inhabitants,
operating and existing under the Constitution and laws of the State of Texas, and a duly adopted
Home Rule Charter of the City, which Charter has not been changed or amended since the passage
of the ordinance authorizing the issuance of the most recently dated, issued and outstanding
obligations of the City.
2. No litigation of any nature has ever been filed pertaining to, affecting or contesting:
(a) the issuance, delivery, payment, security or validity of the proposed Bonds; (b) the authority of
the officers of the City to issue, execute and deliver the Bonds; or (c) the validity of the corporate
existence, the current Tax Rolls, or the Charter of the City; and no litigation is pending pertaining
~""' to, affecting or contesting the boundaries of the City.
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; that 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"); that the Tax Roll for said 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 said 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 and levied, is $365,947,888.
4. Attached hereto as Exhibit A is a true, full and correct schedule and statement of the
aforesaid proposed Bonds, and all presently outstanding tax bond indebtedness of the City, and
,~„ attached hereto as Exhibit B is a combined debt service schedule for all outstanding tax bond
indebtedness of the City (including the aforesaid proposed Bonds).
GENERAL CERTIFICATE
,~.
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«r. 5. The following persons are the duly elected members of the City Council of the City as of
the date hereof
~. Bryan Lankhorst, Mayor Brian Johnson, Councihmember, Place 3
John Clark, Councilmember, Place 1 Ronnie Nowell, Councilmember, Place 4
David Green, Councilmember, Place 2 George Barrett, Councilmember, Place 5
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6. The following persons are the duly appointed Interim City Manager, City Secretary
and Finance Director of the City as of the date hereof:
Interim City Manager Mazk White
~ City Secretary Kathy Turner
Finance Director Clifford RlarkwPtt
«~
7. The City is not in default as to any covenant, condition, or obligation in connection
with any of the outstanding obligations (as described in Exhibit A) of the City or the ordinances
authorizing same.
~«- [The remainder of this page intentionally left blank)
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SIGNED AND SEALED this 11 `h day of January, 2007.
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City Secretary
,,,, City of Ken~~,~'exas
~o
,'~UF KEl1~~
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pYW ~l i • ~°~ `r
• +
(City ~~1) : '~k '.
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~: ~ std
J° +~ : ~ +°
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Pelf lt:'1 ~15195'~!}.
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~~~YG
Y ~
Mayor
City of Kennedale Texas
[SIGNATURE PAGE TO GENERAL CERTIFICATE]
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EXHIBIT A
SCHEDULE OF ALL OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS
~"` OF THE CITY OF KENNEDALE, TEXAS
THE PROPOSED GENERAL OBLIGATION REFUNDING BONDS AND CERTIFICATES:
General Obligation Refunding Bonds, Series 2007, dated February 1, 2007, to be outstanding
in the aggregate principal amount of $4,365,000, bearing interest and maturing as set forth in the
.. Ordinance authorizing such Bonds.
Combination Tax and Revenue Certificates of Obligation, Series 2007, dated February 1,
„~, 2007, to be outstanding in the aggregate principal amount of $2,900,000, bearing interest and
maturing as set forth in the Ordinance authorizing such Certificates of Obligation.
,,,~, ALL PRESENTLY OUTSTANDING TAX INDEBTEDNESS AFTER GIVING EFFECT TO
REFUNDING BEING ACCOMPLISHED BY THE GENERAL OBLIGATION REFUNDING
BONDS):
«~.
Combination Tax and Revenue Certificates of Obligation, Series 1998, dated November 1,
1998, presently outstanding in the principal amount of $185,000.
~`" Combination Tax and Revenue Certificates of Obligation, Series 2005, dated February 1,
2005, presently outstanding in the principal amount of $790,000.
"""` Tax Notes, Series 2006, dated September 15, 2006, presently outstanding in the principal
amount of $300,000.
«.
A-1
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EXHIBIT B
COMBINED GENERAL OBLIGATION DEBT SERVICE SCHEDULE
B-1
City of Kennedale, Texas
Total Debt Service
February 15, 2007
arr
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riscai rear
Endin 9/30 existing Debt
Service Less:
Refunded Bonds Plus
Refundin Bonds Plus:
CO' New Total
s Debt Service
2007 $465,782 $98,908 $86,645 $59,450 $512
969
2008 $496,543 $383,660 $369,321 $211,953 ,
$694
156
2009 $494,996 $385,129 $371,182 $212,955 ,
$694
005
2010 $497,904 $386,160 $372,647 $213,753 ,
$698
143
2011 $500,156 $391,644 $378,615 $214,345 ,
$701
471
2012 $496,864 $386,691 $374,186 $214,733 ,
$699
091
2013 $497,999 $386,380 $374,460 $210,018 ,
$696
096
2014 $444,581 $385,538 $374,336 $210,200 ,
$643
580
2015 $446,695 $384,125 $368,915 $210,178 ,
$641
662
2016 $448,129 $387,019 $373,097 $209,950 ,
$644
157
2017 $448,765 $389,165 $376,683 $214,415 ,
$650
698
2018 $448,593 $390,553 $374,773 $213,573 ,
$646
385
2019 $452,355 $391,018 $377,367 $212,525 ,
$651
229
2020 $450,034 $390,541 $374,464 $211,273 ,
$645
229
2021 $446,920 $389,273 $376,065 $214,713 ,
$648
425
2022 $291,690 $231,040 $215,346 $212,845 ,
$488
841
2023 $289,460 $230,960 $217,406 $210,773 ,
$486
679
2024 $291,643 $230,400 $214,169 $213,393 ,
$488
804
2025
2026 $58,850
$61
320 $210,705 ,
$269,555
2027 , $212,710 $274,030
>tals
$8,029,276
$6,218.203
~~ 4~4 a7d $214,305
@A 9A0 ~~n $214,305
m.., ...... ___
~~
9YIf
SIGNATURE IDENTIFICATION AND NO-LITIGATION CERTIFICATE
We, the undersigned Mayor and City Secretary, respectively, of the CITY OF KENNEDALE,
TEXAS (the "City"), hereby certify as follows:
(a) This certificate is executed and delivered with reference to the "CITY of
v.r KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007," dated February
1, 2007, authorized by an ordinance passed by the City Council of the City on January 11, 2007 (the
"Bonds").
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(b) Each of us signed the Bonds by manually executing or causing facsimiles of our
manual signatures to be printed or lithographed on each of the Bonds, and we hereby adopt said
facsimile signatures as our own, respectively, and declare that said facsimile signatures constitute
our signatures the same as if we had manually signed each of the Bonds.
(c) The Bonds are substantially in the form, and each of them has been duly executed and
signed in the manner, prescribed in the ordinance authorizing the issuance thereof.
(d) At the time we so executed and signed the Bonds we were, and at the time of
~" executing this certificate we are, the duly chosen, qualified, and acting officers indicated therein, and
authorized to execute and sign the same.
""" (e) No litigation of any nature has been filed or is now pending or, to our knowledge,
threatened, to restrain or enjoin the issuance or delivery of any of the Bonds, or which would affect
the provision made for their payment or security, or in any manner questioning the proceedings or
""' authority concerning the issuance of the Bonds, and that so far as we know and believe no such
litigation is threatened.
~" (f) Neither the corporate existence nor boundaries of the City is being contested; no
litigation has been filed or is now pending or, to our knowledge, threatened, which would affect the
authority of the officers of the City to issue, execute, sign, and deliver any of the Bonds; and no
+w~ authority or proceedings for the issuance of any of the Bonds have been repealed, revoked, or
rescinded.
..~ (g) We have caused the official seal of the City to be impressed, or printed, or
lithographed on each of the Bonds; and said seal on each of the Bonds has been duly adopted as, and
is hereby declared to be, the official seal of the City.
~.
~..-
EXECUTED and delivered this FHB 1 5 2007
MANUAL SIGNATURES OFFICIAL TITLES
~ ' nAw
Eryan Lankhorst, Mayor
~~ ~~~' ~~ Kathy Turner, City Secretary
~, Before me, on this day personally appeared the foregoing individuals, known to me to be the
officers whose true and genuine signatures were subscribed to the foregoing instrument in my
presence.
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Given under my hand and seal of office this ) ~ ~ ~ - ~ p a'"J
,~'
Notary Public
Typed Name _ ~~~, e CJ (~ E' ~ c -~
(My Commission Expires _ ~ ~ ~ -aU U ~ )
..
(Notary Seal)
~..
~.
[SIGNATURE PAGE TO THE SIGNATURE IDENTIFICATION AND NO-LITIGATION CERTIFICATE]
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0
CERTIFICATE OF
THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION
"~" RE: NOTICE OF REDEMPTION
""' I, the undersigned officer of THE BANK OF NEW YORK TRUST COMPANY, NATIONAL
ASSOCIATION (the "Bank"), in connection with the issuance of the CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007, dated February 1, 2007 (the "Bonds"),
~" and the redemption prior to maturity, as described in the attached Notice of Redemption, of all of
the CITY OF KENNEDALE, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 1998, dated November 1, 1998, maturing in the years 2008 through 2019,
"" 2021 and 2024 (collectively, the "Refunded Obligations"), hereby certify as follows:
~ (A) the Bank is the Paying Agent/Registrar for the Refunded Obligations;
(B) the Bank has received a copy of the Notice of Redemption with respect to the
Refunded Obligations (a copy of which is attached hereto); and
(C) the Bank will send a copy of such Notice (or a notice prepared by the Bank
containing the information required by the ordinance which authorized the issuance
~`~` of the Refunded Obligations) by United States mail, first-class postage prepaid, at
least 30 days prior to the date fixed for redemption of the Refunded Obligations, to
the registered owner of each Refunded Obligation in accordance with the applicable
"~ provisions of the ordinance which authorized the issuance of the Refunded
Obligations.
EXECUTED THIS ~ _
THE BANK OF NEW YORK TRUST COMPANY,
NATIONAL ASSOCIATION
rer
By
Title:
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NOTICE OF REDEMPTION
of
CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998
(Maturing on February 15 in the years 2008-2019, 2021 and 2024)
~"' NOTICE IS HEREBY GIVEN that the City of Kennedale, Texas (the "City"), in Tarrant County, Texas, has
called for redemption at the redemption price equal to par, plus accrued interest, on February 1 S, 2007(the "Redemption
Date"), all of the City's outstanding Combination Tax and Revenue Certificates of Obligation, Series 1998, dated
November 1,1998, maturing on February 15 in the years 2008 through 2019, inclusive, 2021 and 2024 which are further
rrr described as follows (the "Certificates"):
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CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998
MATURITY
(FEBRUARY 15 }
PRIN CIFAL AMOUNT
MATURING IN YEA$ PRINCIPAL
AMOUNT BEING
REFUNDED STATED
INTEREST
RATE (%}
CUSIP NO.
(489332}
2008 $190,000 $190,000 4.375 DVS
2009 200,000 200,000 4.375 DW3
2010 210,000 210,000 4.375 DX1
2011 225,000 225,000 4.375 DY9
2012 230,000 230,000 4.375 DZ6
2013 240,000 240,000 4.400 EAO
2014 250,000 250,000 4.450 EB8
2015 260,000 260,000 4.500 EC6
2016 275,000 275,000 4.550 ED4
2017 290,000 290,000 4.550 EE2
2018 305,000 305,000 4.600 EF9
2019 320,000 320,000 4.700 EG7
**** **** **** **** ****
2021 685,000 685,000 4.750 EJ1
**** **** **** **** ****
2024 645,000 645,000 4.800 EM4
On February 15, 2007, interest on the Certificates shall cease to accrue and be payable
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THE CERTIFICATES shall be redeemed at The Bank of New York Trust Company, National Association,
successor to U.S. Trust Company of Texas, as the Paying Agent/Registrar for said Certificates. Upon presentation of
,r,,, the Certificates at the Paying Agent/Registrar on the aforementioned redemption date, the holder thereof shall be entitled
to receive the redemption price equal to par and accrued interest to the redemption date.
~.
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NOTICE IS GIVEN that due and proper arrangements have been made for providing the place of payment of
said Certificates called for redemption with funds sufficient to pay the principal amount of said Certificates and the
interest thereon to the redemption date. In the event said Certificates, or any of them are not presented for redemption
'a" by the date fixed for their redemption, they shall not thereafter bear interest.
UNDERTHE PROVISIONS ofSection 3406 ofthe Internal Revenue Code of 1986, as amended, paying agents
,~, making payments of interest and principal on municipal securities may be obligated to withhold a tax from remittance
to individuals who have failed to furnish the paying agent with a valid taxpayer identification number. Registered holders
who wish to avoid the imposition ofthe tax should submit certified taxpayer identification numbers (via form W-9) when
presenting the Certificates for payment.
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THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the
issuance of the aforementioned Certificates and in accordance with the recitals and provisions of said Certificates.
""' NOTICE IS FURTHER GIVEN that the Certificates should be submitted to either of the following addresses:
Express Delivery First Class/Registered/Certified Mail
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The Bank of New York, N.A.
Institutional Trust Services
,~, 2001 Bryan Street, 9`~ Floor
Dallas, Texas 75201
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The Bank of New York, N.A.
Institutional Trust Services
P.O. Box 2320
Dallas, Texas 75221-2320
Hand Delivery
The Bank of New York, N.A.
GIS Unit Trust Window
New York Plaza, 1st Floor
New York, New York 10004
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CERTIFICATE OF SUFFICIENCY
""" I, the undersigned officer of THE BANK OF NEW YORK TRUST COMPANY, NATIONAL
ASSOCIATION (the "Bank"), hereby certify as follows:
"~" 1. This Certificate is given at the request of the CITY OF KENNEDALE, TEXAS (the "Issuer")
in connection with the issuance by the Issuer of its "General Obligation Refunding Bonds, Series
2007" (the "Series 2007 Bonds"), and the redemption, at the option of the Issuer, on February 1 S,
""' 2007 (the "Redemption Date") of all of the Issuer's outstanding Combination Tax and Revenue
Certificates of Obligation, Series 1998, dated November 1, 1998, maturing on February 15 in the
years 2008 through 2019, inclusive, 2021 and 2024 (the "Refunded Obligations").
2. The Bank serves as the Paying Agent/Registrar in connection with the Refunded
Obligations in accordance with the provisions of the Paying Agent/Registrar Agreement, dated as
~' of November 1, 1998 (the "Agreement"), between the Issuer and the Bank (as successor in interest
to the original Paying AgentlRegistrarvamed therein). Representations made in this Certificate are
made in our capacity as the Paying Agent/Registrar for the Refunded Obligations.
3. The Bank hereby acknowledges that it has received instructions from an authorized
representative of the Issuer directing the Bank to cause the outstanding Refunded Obligations to be
~" redeemed on the Redemption Date in accordance with the provisions of the ordinance which
authorized the issuance of the Refunded Obligations (the "1998 Bond Ordinance").
~""' 4. The Bank hereby certifies that, as of the date of this Certificate (i) the Refunded
Obligations are outstanding in the aggregate principal amount of $4, 325, 000, and (ii) all interest
which has accrued on the Refunded Obligations to the last interest payment date thereof (i.e.
`~ February 15, 2007) will be paid separately as part of the Issuer's regularly scheduled principal and
interest payment on February 15, 2007 (the "February 15, 2007 Principal and Interest Payment");
therefore, no further interest on the Refunded Obligations will be due on the Refunded Obligations
""' on the Redemption Date.
5. The Bank hereby further certifies that the total amount of principal, redemption premium,
"'r' and accrued interest which will be due and payable on the Refunded Obligations on the Redemption
Date is $4,325,000, which amount is calculated as follows:
~"' Principal amount of Refunded Obligations $4,325,000
Redemption Premium $0
Accrued Interest $0
w.
Total redemption price due on Redemption Date $4,325,000
6. The Bank has been advised by representatives of the Issuer that the Bank will receive on
February 15, 2007 -the date of delivery of the Series 2007 Bonds - from BANxoFANrEiucA, N.A.,
as Paying Agent/Registrar for the Series 2007 Bonds, the amount of $4,325,300.
rr
.~
The Bank will retain $300 as its bond call fee (the "Bond Call Fee"). The Bank hereby agrees to use
the remaining funds ($4,325,000) to immediately pay the redemption price of the Refunded
«~ Obligations in the amount set forth in Paragraph 5 above.
7. The Bank hereby further acknowledges and agrees that, except for the aforementioned
Bond Call Fee, no additional funds will be required to pay any fees or expenses of the Bank as
Paying AgentlRegistrar for the Refunded Obligations in connection with the redemption of the
Refunded Obligations.
8. Based on the certifications set forth in Paragraphs 4, 5, 6 and 7 above, and assuming that
the Bank actually receives the funds described in Paragraph 6 above and receives the February 15,
2007 Principal and Interest Payment, the amount of money available in the trust account described
in Paragraph 6 above on the Redemption Date will be sufficient to pay all principal and interest
coming due on the Refunded Obligations on such date.
The remainder of this page intentionally left blank.)
~.
~..
W.
~.
EXECUTED THIS FEB - 5 2007
THE BANK OF NEW YORK TRUST COMPANY,
NATIONAL ASSOCIATION
By
Title: TANT TREASURER
~.
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..
January 11, 2007
,,,~, The Attorney General of Texas
Public Finance Division
300 W. 15 Street, 9`~ Floor
,~„ Austin, Texas 78701
RE: CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BONDS,
•~ SERIES 2007
Ladies and Gentlemen:
It is requested that you examine the above issues of obligations and the proceedings
authorizing their issuance.
~..
We enclose herewith one signed but undated copy of the Signature Identification and No-
Litigation Certificate. Upon approval of the obligations, you are authorized to insert the date of
"~" approval in said Signature Certificate. If any litigation should develop before you have approved the
obligations, we will notify you at once both by telephone and telecopy. With this assurance you can
rely upon the absence of any such litigation at the time you approve the obligations unless we advise
'~ you otherwise.
After you have examined the obligations, kindly deliver them to the Office of the
Comptroller of Public Accounts of the State of Texas. The Comptroller has received instructions
as to disposition of such obligations following their registration.
Sincerely yours,
W.
CITY OF KENNEDALE, TEXAS
~ ~~~r~~-
May
+~ cc: Comptroller of Public Accounts
F
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Texas State Comptroller of Public Accounts
,~„ Cash and Securities Management Division
Thomas Jefferson Rusk Building
208 East 10th Street, 4th Floor, Room 448
,~,. Austin, Texas 78701-2407
Attn: Melissa Mora
January 11, 2007
++~ RE: CITY OF I{ENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BONDS,
SERIES 2007
Ladies and Gentlemen:
The Attorney General will deliver to you the above-described issues of obligations. At such
"~ time as you have registered such obligations, this will be your authority to deliver them to an
authorized representative of McCall, Parkhurst & Horton L.L.P. who will deliver said obligations
to the Paying Agent/Registrar named in the obligations for delivery to the purchasers thereof.
At the time you have registered the obligations, please deliver three copies of the Attorney
General's opinion and the Comptroller's Signature Certificate covering said issue of obligations to
a representative of McCall, Parkhurst & Horton L.L.P., or send such documents by overnight courier
to Noel Valdez, McCall, Parkhurst & Horton L.L.P., 700 N. St. Mary's, Suite 1525, San Antonio,
Texas 78205.
.~.
Sincerely yours,
0
cc: Attorney General of Texas
CITY OF KENNEDALE, TEXAS
Gam, ~6t/u.~ r~ W7
May
~r
SOUTHWEST
~' SECURITIES
Member of SUVS Gawp
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CLOSING MEMORANDUM
r
$4,365,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007
"~' (THE "BONDS")
Date: February 8, 2007
~" To: Attached Distribution List
From: Mark M. McLiney
,r+ Southwest Securities
(210) 226-8677
~ 1. The above-referenced Bonds are scheduled to close on Thursday, February 15, 2007 at
10:00 A.M., Central Time. A debt service schedule is attached as Exhibit "A".
.. A. Bank of America, N.A. (the "Purchaser") will purchase the Bonds for
$4,365,000.00. There will be no accrued interest.
,,~, B. The City of Kennedale, Texas (the "City") shall wire $12,262.00, as the City's
contribution to Bank of America, Texas (serving as "Paying Agent") ABA#
026009593, Account #0180019828, Reference: City of Kennedale, Texas
General Obligation Refunding Bonds, Series 2007, Attention: Ms. Glenda
'"" Beasley, (817) 390-6414.
2. Disbursement by Bank of America, N.A. (serving as Paying Agent):
..
wr
,..
A. The Paying Agent shall wire $4,325,300.00 for full redemption on February 15,
2007, of the City's Combination Tax and Revenue Certificates of Obligation,
Series 1998 (the "Series 1998 Certificates") and the Bond Call Fee associated
with the redemption of the Series 1998 Certificates to Bank of New York Trust
Company, N.A., (the "Paying Agent for the Refunded Bonds"),
ABA#021000018, GLA#111565, TAS#184153, Reference: City of Kennedale
Texas, General Obligation Refunding Bonds, Series 2007 Attention: Pat Blue,
(214) 880-8221. The amount is calculated as follows:
Par Amount of Call (Maturities 2008-2019, 2021 and 2024)
Bond Call Fee
Total Wire
$4,325,000.00
300.00
$4.325.300.00
«W
City of Kennedale, Texas
Closing Memorandum
February 8, 2007
""" Page 2
..
B. The Paying Agent shall wire $51,962.00 to Southwest Securities for the fees
~, and expenses associated with the L egal Authorization and Issuance of the B onds
to JPMorgan Chase Bank, Houston, Texas, ABA #021000021, for credit to
Southwest Securities, Account #08805076955, for final credit to City of
Kennedale, Texas General Obligation Refunding Bonds, Series 2007, (94-9030-
~' 119147), Attention: Angela Irvine, (214) 859-6353.
3. The Reconciliation of Receipts and Disbursements by the Paying Agent/Registrar is as
follows:
~- Receiats:
Purchase Price of the Bonds $4,365,000.00
„,~ Transfer from the City 12 262.00
TOTAL RECEIPTS 4.377.262 00
Disbursements:
.r
Redemption of Series 1998 Certificates of Obligation $4,325,000.00
Bond Call Fee $300.00
;,,~ Costs of Issuance 51 962.00
TOTAL DISBURSEMENTS 4.377.262.00
r~.
..
If there are any questions, please feel free to call me at (210) 226-8677.
~...
W. $4,365,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS,
SERIES 2007
~..
DISTRIBUTION LIST
Issuer Financial Advisor
Mr. Clifford Blackwell Mr. Mark M. McLiney
+•• Director of Finance Southwest Securities
City of Kennedale 4040 Broadway
Suite 220
405 Municipal Drive ,
San Antonio
Texas 78209
Kennedale, Texas 76060 ,
Phone: (817) 478-5418, x109 Phone: (210) 226-8677
Facsimile: (817) 561-7308 Facsimile: (210) 226-8299
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cblackwellCcDcitvofkennedale com
mmclin
CD
ev
swst.com
Purchaser/Paving Agent
"""
Mr. Karl Kuykendall Mr. Ryan B. Cunningham
Bank of America, N.A. Southwest Securities
4040 Broadway
Suite 220
514 Austin Avenue ,
San Antonio
Texas 78209
+~• Waco, Texas 76701 ,
Telephone: (254) 750-6126
Facsimile: (254) 750-6143 Phone: (210) 226-8677
~"~'
Karl.kuvkendallCa'~bankofamerica com Facsimile: (210) 226-8299
rcunninahamta'~swst com
Ms. Glenda Beasley, AVP Bond Counsel
Bank of America, N.A. Mr. Noel Valdez
Commercial Bank-Central Region
500 W
"' McCall, Parkhurst & Horton L.L.P.
~r est 7
Street, Unit 36 1525 One Riverwalk Place
Fort Worth, Texas 76102 San Antonio, Texas 78206
Telephone: (817) 390-6414 Phone: (210) 225-2800
rr Facsimile: (866) 493-8130 Facsimile: (210) 225-2984
Glenda.beasley(cabankofamerica com nvaldezCa~mphleaal com
~+ Pavins~ Agent-Refunded Bonds
Mr. Pat Blue, Assistant Treasurer
Bank of New York Trust Company, N.A.
'"" 600 North Pearl Street
South Tower, Suite 420
Dallas, Texas 75201
Telephone: (214) 880-8221
Facsimile (214) 880-8241
pblueCaabankofnv.com
~.
February 8, 2007
Mr. Clifford Blackwell
r. Director of Finance
City of Kennedale
405 Municipal Drive
Kennedale, Texas 76060
• SOUTHWEST
SECURITIES
Memberofsws Group
~ STATEMENT
For services rendered in connection with the legal authorization and issuance
of $4,365,000 City of Kennedale, Texas General Obligation Refunding
W. Bonds, Series 2007
51.962.00
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Ending
rincipal BOND DEBT SERVICE
City of Kennedale, Texas
Refunding Bonds, Series 2007
Exhibit'A'
Coupon Interest Debt Service
~
Debt Service
02/15/2007
08/15/2007 86,645.25 86
645.25
09/30/2007 ,
02/15/2008
200,000
3.970%
86,645.25
286,645.25 86,645.25
08/15/2008 82,675.25 82,675.25
09/30/2008 369
320
50
02/15/2009 210,000 3.970% 82,675.25 292,675.25 ,
.
08/15/2009 78,506.75 78,506.75
09/30/2009 371
182
00
02/15/2010 220,000 3.970% 78,506.75 298
506.75 ,
.
08/15/2010 74,139.75 ,
74,139.75
09/30/2010
02/15/2011
235,000
3.970%
74,139.75
309,139.75 372,646.50
08/15/2011 69,475.00 69,475.00
09/30/2011
02/15/2012
240,000
3.970%
69,475.00
309,475.00 378,614.75
08/15/2012 64,711.00 64
711.00
09/30/2012 ,
02/15/2013
250,000
3.970%
64,711.00
314,711.00 374,186.00
08/15/2013 59,748.50 59,748.50
09/30/2013
02/15/2014
260,000
3.970%
59,748.50
319,748.50 374,459.50
08/15/2014 54,587.50 54,587.50
09/30/2014
02/15/2015
265,000
3.970%
54,587.50
319
587.50 374,336.00
08/15/2015 49,327.25 ,
49,327.25
09/30/2015
02/15/2016
280,000
3.970%
49,327.25
329
327.25 368,914.75
08/15/2016 43,769.25 ,
43
769.25
09/30/2016 ,
02/15/2017
295,000
3.970%
43,769.25
338,769.25 373,096.50
08/15/2017 37,913.50 37,913.50
09/30/2017
02/15/2018
305,000
3.970%
37,913.50
342,913.50 376,682.75
08/15/2018 31,859.25 31,859.25
09/30/2018
02/15/2019
320,000
3.970%
31,859.25
351,859.25 374,772.75
08/15/2019 25,507.25 25,507.25
09/30/2019
02/15/2020
330,000
3.970%
25,507.25
355
507.25 377,366.50
08/15/2020 18,956.75 ,
18,956.75
09/30/2020
02/15/2021
345,000
3.970%
18,956.75
363
956.75 374,464.00
08/15/2021 12,108.50 ,
12
108.50
09/30/2021 ,
02/15/2022
195,000
3.970%
12,108.50
207,108.50 376,065.25
08/15/2022 8,237.75 8
237.75
09/30/2022 ,
02/15/2023
205,000
3.970%
8,237.75
213,237.75 215,346.25
08/15/2023 4,168.50 4,168.50
09/30/2023
02/15/2024
210,000
3.970%
4,168.50
214,168.50 217,406.25
09/30/2024
214,168.50
4,365,000 1,604,674.00 5,969,674.00 5,969,674.00
Feb 1, 2007 9:28 am Prepared by Southwest Securities (Finance 6.000 Kennedale:KEN-GOREF07) page 1
ow
RECEIPT FOR PROCEEDS
The undersigned hereby certifies as follows:
"~" (a) This certificate is executed and delivered with reference to the CITY of
KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007 (the "Bonds"),
dated February 1, 2007, in the aggregate principal amount of $4,365, 000, authorized by an ordinance
ww passed by the City Council of the CITY OF I{ENNEDALE, TEXAS the "Ci "
( ty) on January 11, 2007.
„~, (b) The undersigned is the duly chosen and qualified Director of Finance.
(c) The Bonds have been duly delivered to the initial purchaser thereof, namely
BANK OF AMERICA, N.A.
~. (d) The Bonds have been paid for in full by said purchasers concurrently with the
delivery of this Receipt, and the City has received, and hereby acknowledges receipt of, the agreed
purchase price for the Bonds, being $4,365,000.
~~EB 1 5 2007
EXECUTED and delivered this
CITY OF KENNEDALE, TEXAS
~~~
Mr. i f Blackwell ----
Director ofFinance
visciusureu ~ti.org
Page 1 of 1
Hide CUSIPs
_' SCI ~ Ct3t"1 t". ~l" CLii'
oar ~~~t ~ ~i" .fir
Filing #: 20070410625068
Filing Date: 5/15/2007 4:10:23 PM
... KENNEDALE TEX
Issue Date
1998-11-01
489332DV5
„~ 489332EB8
489332EJ1
Doc Type
'~" 8. Bond Calls
9. Defeasances
~.
Name:
Employer:
.w Addressi:
Address2:
City, State
~" Phone:
Email:
Filer type:
w
Bond Title
CTFS OBLIG
CUSIPs
489332DW3 489332DX1 489332DY9 489332DZ6 489332EA0
489332EC6 489332ED4 489332EE2 489332EF9 489332EG7
489332EM4
Doc Date File Name File Size Doc Title
2/15/2007 Notice of Redemption3.pdf 14807 Notice of Redemption
Contact Information
Kathy Cooper
McCall, Parkhurst & Horton
700 North St. Mary's St., Suite 1525
Zip: San Antonio, TX 78205
210-225-2800
kcooper@mphlegal.com
Dissemination Agent
[ttp://www.disclosureusa.org/pages/CoversheetPrintable.aspx?filingid=122627&showcusips=true 5/15/2007
0
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NOTICE OF REDEMPTION
of
CITY OF KENNEDALE, TEXAS
++rr COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998
(Maturing on February 15 in the years 2008-2019, 2021 and 2024)
NOTICE IS HEREBY GIVEN that the City of Kennedale, Texas (the "City"), in Tarrant County, Texas, has
wr called for redemption at the redemption price equal to par, plus accrued interest, on February 1 S, 2007(the "Redemption
Date"), all of the City's outstanding Combination Tax and Revenue Certificates of Obligation, Series 1998, dated
November 1, 1998, maturing on February 15 in the years 2008 through 2019, inclusive, 2021 and 2024 which are further
described as follows (the "Certificates"):
~w
CITY OF KENNEDALE, TEXAS
.~ COYBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998
PRINCIPAL STATED
MAT[IRITY PRINCIPAL AMOUNT AMOUNT BEING INTEREST
W. (FEBRUARY 15) MATURING IN YEAR REFUNDED (°) (4893320
RATE /o )
2008 $190,000 $190,000 4.375 DVS
~+ 2009 200,000 200,000 4.375
DW3
2010 210,000 210,000 4.375
DX1
+~+' 2011 225,000 225,000 4.375
DY9
2012 230,000 230,000 4.375 DZ6
"""' 2013 240,000 240,000 4.400
EAO
2014 250,000 250,000 4.450 EB8
++a- 2015 260,000 260,000 4.500
EC6
2016 275,000 275,000 4.550
ED4
~r 2017 290,000 290,000 4.550
EE2
2018 305,000 305,000 4.600
EF9
+++~ 2019 320,000 320,000 4.700
EG7
**~* ****
**** +***
****
~*+ 2021 685,000 685,000 4.750
E11
**** ****
**+* ****
****
~ 2024 645,000 645,000 4.800
EM4
On February 15, 2007, interest on the Certificates shall cease to accrue and be payable.
THE CERTIFICATES shall be redeemed at The Bank of New York Trust Company, National Association,
successor to U.S. Trust Company of Texas, as the Paying Agent/Registrar for said Certificates. Upon presentation of
the Certificates at the Paying Agent/Registrar on the aforementioned redemption date, the holder thereof shall be entitled
rr to receive the redemption price equal to par and accrued interest to the redemption date.
rr
NOTICE IS GIVEN that due and proper arrangements have been made for providing the place of payment of
said Certificates called for redemption with funds sufficient to pay the principal amount of said Certificates and the
interest thereon to the redemption date. In the event said Certificates, or any of them are not presented for redemption
rrr by the date tixed for their redemption, they shall not thereafter bear interest.
UNDER THE PROVISIONS of Section 3406 ofthe Internal Revenue Code of 1986, as amended, paying agents
making payments of interest and principal on municipal securities may be obligated to withhold a tax from remittance
'"~'r to individuals who have failed to furnish the paying agent with a valid taxpayer identification number. Registered holders
who wish to avoid the imposition ofthe tax should submit certified taxpayer identification numbers (via form W-9) when
presenting the Certificates for payment.
ww
THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the
issuance of the aforementioned Certificates and in accordance with the recitals and provisions of said Certificates.
rr NOTICE IS FURTHER GIVEN that the Certificates should be submitted to either of the following addresses:
Express Delivery First Class/Re istered/Certified Mail
+rn Hand_ D____elivery
The Bank of New York, N.A. The Bank of New York, N.A. The Bank of New York, N.A.
Institutional Trust Services Institutional Trust Services
2001 Bryan Street, 9`" Floor GIS Unit Trust Window
arr P.O. Box 2320 New York Plaza, 1st Floor
Dallas, Texas 75201 Dallas, Texas 75221-2320 New York, New York 10004
Dated: February 15, 2007
ww~ l~
~~
~,~ ,
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ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
rr
February 15, 2007
...
THIS IS TO CERTIFY that the City of Kennedale, Texas (the "Issuer"), has
submitted to me City of Kennedale Texas General Obligation Refundin Bond
Series 2007 (the "Bond"), in the principal amount of $4,365,000, for approval. The
Bond is dated February 1, 2007, numbered T-1, and was authorized by Ordinance
No. 355 of the Issuer passed on January 11, 2007.
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 undertaking to verify the same by independent investigation.
I express no opinion relating to any official statement or any other offering material relating
'~" to the Bond.
Based on my examination, I am of the opinion, as of the date hereof and under existing law,
~"' as follows:
(1) The Bond has been issued in accordance with law and is a valid and binding
.. obligation of the Issuer.
(2) In accordance with the provisions of the law, firm banking arrangements have been
~ made for the discharge and final payment or redemption of the obligations being
refunded upon deposit of an amount sufficient to pay said obligations when due.
..
(3) The Bond is payable from the proceeds of an ad valorem tax levied, against all
taxable property within the Issuer, within the limits prescribed by law.
..
Therefore, the Bond is approved.
Posy OFFICI=. Box ]2548, Ausr~N, "I'exns 78711-2548 ~reL:(512)4G3-2100 a~a~w.o_~c.sr~rr. rs.us
An lgnu! Emplnymen[ Opyortuni[y Ismylnyer ~ Prin[cd on Racyclcd Payer
'~ City of Kennedale, Texas General Obligation Refunding Bond, Series 2007 - $4,365,000
-Page 2-
The Comptroller is instructed that she may register the Bond without the cancellation of the
"" underlying securities being refunded thereby.
Attorney G ral of the State of Texas
~r Na45953
Book No.2007-A
JCH
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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 15th day of February 2007, I signed the name of the Comptroller to the certificate of registration
endorsed upon the:
~" City of Kennedale. Texas General Obligation Refunding Bond Series 2007,
numbered T~1 dated
following signature:
IN WITNESS
and that in signing the certificate of registration I used the
I have executed this cert~ate~this the 15th day of February 2007.
~.,
I, Susan Combs, Comptroller of Public Accounts of the State of Texas, certify 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 72463.
r
GIVEN under my hand and seal of office at Austin, Texas, this the 15th day of February
2007.
.^.
SUSAN COMBS
Comptroller of Public Accounts
of the State of Texas
0
0
0
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 Attorney General approving the:
City of Kennedale Texas General Obligation Refunding Bond Series 2007
,,, numbered T-1, of the denomination of $ 4,365.000, dated February 1 2007, as
authorized by issuer, interest 3.97 percent, under and by authority of which said
bonds/certificates were registered electronically in the office of the Comptroller,
on the 15th dav_of February 2007, under Registration Number 72463.
Given under my hand and seal of office, at Austin, Texas, the 15th day of
February 2007.
SUSAN COMBS
""' Comptroller of Public Accounts
of the State of Texas
~.
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LAW OFFICES
M~CALL, PARKHURST & NORTON L.L.P.
717 NORTH HARWOOD 700 N. ST MARY'S STREET 600 CONGRESSAVENUE
NINTH FLOOR 1525 ONE RIVERWALK PLACE 12500NEAMERICANCENTER
wW DALLAS, TEXAS 7520 1-658 7 SAN ANTONIO, TEXAS 78205-3503 AUSTIN, TEXAS 78701-3248
TELEPHONE: 214 754-9200 TELEPHONE: 210 225-2800 TELEPHONE: 512 478-3805
FACSIMILE: 214 754-9250 FACSIMILE: 210 225-2984 FACSIMILE: 512 472-0871
February 15, 2007
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007
DATED AS OF FEBRUARY 1, 2007
IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,365,000
~.
AS BOND COUNSEL FOR THE CITY OF KENNEDALE, TEXAS (the "City") in
connection with the issuance of the bonds described above (the "Bonds"), we have examined into
"'"' the legality and validity of the Bonds, which bear interest from the date of initial delivery of the
Bonds until maturity, at the rate and payable on the dates as stated in the text of the Bonds, and
which mature and are subj ect to optional redemption, all in accordance with the terms and conditions
+~ stated in the text of the Bonds.
WEHAVEEXAMINED the applicable and pertinent provisions ofthe Constitution and laws
,,,~, of the State of Texas and a transcript of certified proceedings of the City, and other pertinent
instruments authorizing and relating to the issuance of the Bonds including (i) the ordinance
authorizing the issuance of the Bonds (the "Ordinance"), (ii) one of the executed Bonds (Bond
No. T-1), and (v) the City's Federal Tax Certificate of even date herewith.
a~
BASED ON SAID EXAMINATION, IT IS OUR OPINION that the Bonds have been
authorized, issued and delivered in accordance with law; that the Bonds constitute valid and legally
binding general obligations of the City in accordance with their terms except as the enforceability
thereofmaybe limited bybankruptcy,insolvency, reorganization, moratorium, liquidation and other
similar laws now or hereafter enacted relating to creditors' rights generally or by general principles
of equity which permit the exercise of judicial discretion; that the City has the legal authority to issue
the Bonds and to repay the Bonds; that ad valorem taxes sufficient to provide for the payment of the
interest on and principal of the Bonds, as such interest comes due, and as such principal matures,
have been levied and ordered to be levied against all taxable property in the City, and have been
pledged for such payment, within the limits prescribed by law.
ITIS FURTHER OUR OPINION, except as discussed below, that the interest on the Bonds
is excludable from the gross income of the owners for federal income tax purposes under the statutes,
regulations, published rulings and court decisions existing on the date of this opinion. We are further
of the opinion that the Bonds are not "specified private activity bonds" and that, accordingly, interest
on the Bonds will not be included as an individual or corporate alternative minimum tax preference
item under section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code"). In expressing the
aforementioned opinions, we have relied on and assumed compliance by the City with, certain
representations and covenants regarding the use and investment of the proceeds of the Bonds. We
call your attention to the fact that failure by the City to comply with such representations and
covenants may cause the interest on the Bonds to become includable in gross income retroactively
to the date of issuance of the Bonds.
~..
City ofKennedale, Texas General Obligation Refunding Bonds, Series 2007
February I5, 2007
"""" Page 2
...
EXCEPTASSTATED ABOVE, we express no opinion as to any other federal, state or local.
tax consequences of acquiring, carrying, owning or disposing of the Bonds. In particular, but not
,~ by way of limitation, we express no opinion with respect to the federal, state or local tax
consequences arising from the enactment of any pending or future legislation.
WE CALL YOURATTENTIONTOTHF FACT that the interest ontax-exempt obligations,
~"" such as the Bonds, is included in a corporation's alternative minimum taxable income for purposes
of determining the alternative minimum tax imposed on corporations by section 55 of the Code.
"'~' OUR SOLE ENGAGEMENT in connection with the issuance of the Bonds is as Bond
Counsel for the City, and, in that capacity, we have been engaged by the City for the sole purpose
of rendering an opinion with respect to the legality and validity of the Bonds under the Constitution
~•• and laws of the State of Texas, and with respect to the exclusion from gross income of the interest
on the Bonds for federal income tax purposes, and for no other reason or purpose. The foregoing
opinions represent our legal judgment based upon a review of existing legal authorities that we deem
,;,,,, relevant to render such opinions and are not a guarantee of a result. We have not been requested to
investigate or verify, and have not independently investigated or verified, any records, data, or other
material relating to the financial condition or capabilities of the City, or the disclosure thereof in
,~ connection with the sale of the Bonds, and have not assumed any responsibility with respect thereto.
We express no opinion and make no comment with respect to the marketability of the Bonds and we
have relied solely on certificates executed by officials of the City as to the current outstanding
indebtedness of, and assessed valuation of taxable property within, the City.
OUR OPINIONS ARE BASED ON EXISTING LAW, which is subject to change. Such
opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to
update or supplement our opinions to reflect any facts or circumstances that may thereafter come to
our attention or to reflect any changes in any law that may thereafter occur or become effective.
Moreover, our opinions are not a guarantee of a result and are not binding on the Internal Revenue
Service (the "Service"); rather, such opinions represent our legal judgment based upon our review
of existing law and in reliance upon the representations and covenants referenced above that we
deem relevant to such opinions. The Service has an ongoing audit program to determine compliance
with rules that relate to whether interest on state or local obligations is includable in gross income
for federal income tax purposes. No assurance can be given whether or not the Service will
commence an audit ofthe Bonds. If an audit is commenced, in accordance with its currentpublished
procedures the Service is likely to treat the City as the taxpayer. We observe that the City has
covenanted not to take any action, or omit to take any action within its control, that if taken or
omitted, respectively, may result in the treatment of interest on the Bonds as includable in gross
income for federal income tax purposes.
Respectfully,