Town Commissioners Ordinance — Ordinance-25-01

ORDINANCE 25.0I

INTRODUCED BY: Alton Hardee, Jr., President AN ORDINANCE of The Town Commissioners of Queenstown (the "Town") authorizing the issuance, upon the full faith and credit of the Town, of (i) a general obligation installment bond in the principal amount not to exceed One Million Eight Hundred Twenty- Eight Thousand Dollars ($1,828,000) to be designated ooThe Town Commissioners of Queenstown General Obligation Bond (Water System Improvement)" (the "Botd"), with

such other designation or modified designation as authorized by the Town, and (ii) a general obligation note in the maximum principal amount not to exceed One Million Eight Hundred Twenty-Eight Thousand Dollars ($ I ,828,000) to be designated 'oThe Town Commissioners of Queenstown General Obligation Note (Water System Improvement)" (the "Note") with such other designation or modified designation as authorized by the

Town, each under the authority of 19-207 and 19-301, et seq. of the Local Government Article of the Annotated Code of Maryland (2013 Replacement Volume, as amended) (the "Enabling Act") and Section 19-46 of the Charter of the Town (the "Charter"); the net proceeds of the sale of the Bond and the Note, respectively, will be used and applied for the public pu{pose of financing and refinancing the costs of the refurbishment of the existing

50,000 gallon elevated tank located on Wall Street, the installation of a new 100,000 gallon ground storage tank, the construction of a new four inch well into the Mattawan aquifer and a new water treatment facility, and the replacement of undersized and/or defective watermains to meet the provisions of the 10 States Standards to all areas within the Town service atea, and the extension of new water mains to new areas, together with the

acquisition of all necessary property rights and equipment, together with any related construction, architectural, financial, fiscal, legal, design, planning and engineering expenses; prescribing the form and tenor of the Bond and the Note and the terms and conditions for the issuance and sale of the Bond and the Note; providing for the levy and collection of any taxes necessary for the prompt payment of the maturing principal of and

interest on the Bond and the Note and that the full faith and credit and taxing power of the Town be irrevocably and unconditionally pledged to the payment of the principal and interest on the Bond and the Note.

RECITALS

Sections 19-207 and 19-301, et seq. of the Local Government Article of the Annotated Code of Maryland (2013 Replacement Volume, as €unended) (the "Enabling Act") and Section 19- 46 of the Charter of the Town of Queenstown, Queen Anne's County, Maryland (the "Charter") authorize The Town Commissioners of Queenstown (the "Town") to issue its general obligation debt for any proper public purpose.

The Town has received one written commitment from the United States of America, acting through the Rural Utilities Service, United States Department of Agriculture (the "USDA") for a loan in the maximum principal amount of One Million Eight Hundred Twenty-Eight Thousand Dollars ($1,828,000) to finance and refinance a portion of the costs of the refurbishment of the existing 50,000 gallon elevated tank located on Wall Street, the installation of a new 100,000

gallon ground storage tank, the construction of a new four inch well into the Mattawan aquifer and a new water treatment facility, and the replacement of undersized and/or defective watermains to meet the provisions of the 10 States Standards to all areas within the Town service area, and the extension of new water mains to new areas, including (without limitation) the costs of acquisition and development of property rights and the acquisition and installation of equipment, together with

any related architectural, financial, fiscal, legal, design, planning and engineering expenses (collectively, the "Project").

The Town has received a written commitment from Queenstown Bank (the "Bank") to provide interim financing for the Project in the aggregate principal amount of One Million Eight Hundred Twenty-Eight Thousand Dollars ($1,828,000) (the "Bank Loan"). The Town will issue its general obligation note to evidence its obligation to the Bank with respect to the Bank Loan. Upon completion of the Project, the Town intends to repay the Bank Loan with the proceeds of the Bond

to be issued to USDA ffid, as necessary or appropriate, other available funds.

NOW, THERBFORE, BE IT ENACTED BY THE TOWI\

OF

QUEENSTOWN (the "Town"), That:

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Section L.

All terms used herein which are defined in the Recitals shall have the meanings given such terms therein. The Recitals are incorporated into the terms of this Ordinance as material terms of the Ordinance.

Section 2.

Acting pursuant to the authority of Sections 19-207 and Sections 19-301, et seq. of the Enabling Act and Section l9-46 of the Charter, the Town hereby determines to borrow money and incur indebtedness for the public purpose of (i) financing and refinancing a portion of the costs of construction of the Project as defined and described in the Recitals herein, and (ii) paying the cost of issuing such indebtedness.

Section 3.

To evidence the borrowing and indebtedness authorized in Section 2 of this Ordinance, the Town, acting pursuant to the authority of the Enabling Act and the Charter, shall issue and sell, upon its full faith and credit, a general obligation installment bond in the principal amount not to exceed One Million Eight Hundred Twenty-Eight Thousand Dollars ($1,828,000) to be designated "The Town Commissioners of Queenstown General Obligation Bond (Water System

Improvement)". There shall be added to the title of the Bond a designation colresponding to the year in which the Bond is issued and, as appropriate, an additional letter or other designation to distinguish the Bond from other indebtedness issued by the Town. The Town may modifu or add such additional designation(s) as it deems appropriate to distinguish the Bonds or any series thereof. The Bond shall be dated the date of its delivery and shall be issued in the form of a single

fully registered installment bond, without coupons attached. The Bond shall bear interest at a rate not to exceed 3.125%. The principal of and interest on the Bond shall be paid in equal quarterly installments and the final payment of the Bond shall be paid on a date not later than fotty (40) years from the date of issuance, except that prepayments may be made at the option of the Town in accordance with the USDA rules and regulations in effect from time to time.

-3- 4.

Section The Bond shall be executed in the name of the Town and on its behalf by the President of the Commissioners of the Town (the "President"). The corporate seal of the Town shall be affixed to the Bond, attested by the manual signature of the Clerk-Treasurer of the Town (the "Clerk-Treasurer"). The principal of and interest on the Bond shall be paid by the Town by electronic funds transfer (including, without limitation, any pre-authorized debit payment process

pursuant to which the Town authorizes payments to be withdrawn electronically from an account of the Town's on or about the day that principal or interest is due) or check mailed to the registered owner thereof at the address of such owner as it appears on the books kept for the registration of the Bond at the office of the Clerk-Treasurer in Queenstown, Maryland. In the event any official whose signature appears on the Bond ceases to be an official prior to the delivery of the Bond, or

shall have become such official after the date of this Ordinance. the Bond shall. nonetheless. be a valid and legally binding obligation of the Town in accordance with its terms.

5.

Section The Bond shall be transferable only upon the books kept for that purpose at the office of the Clerk-Treasurer by the registered owner in person or by his duly authorized attorney, upon surrender thereof, together with a written instrument of transfer satisfactory to the Clerk-Treasurer, duly executed by such registered owner or duly authorized attorney 6.

Section Except as provided hereinafter or in a supplemental resolution or resolutions of the Town adopted prior to the issuance of the Bond, the Bond shall be issued in substantially the A.

registered installment bond form provided Exhibit Appropriate variations and insertions shall be made to provide dates, numbers and amounts, and modifications not materially altering its substance may be made by the President as deemed necesSory, appropriate or convenient. All of the covenants contained in the form of bond attached hereto as Exhibit A are hereby adopted by the Town as and for the form of obligation to be incurred by the Town, and the covenants and

-4- conditions contained therein are hereby made binding upon the Town, including the promise to pay therein contained.

Section 7. The

Clerk-Treasurer is hereby designated to receive payment on behalf of the Town of the proceeds of the sale of the Bond. Such proceeds shall be deposited in the proper accounts of the Town and shall be used and applied by the Town exclusively and solely for the public purposes described in Section 2 of this Ordinance. If the proceeds received from the sale of the Bond exceed the amount needed for such public purposes, the unexpended excess shall be

applied in the manner required by United States regulations, practices and policies applicable from time to time, provided such application is not prohibited by ary provision of the statutes of the State of Maryland, the Charter of the Town or this Ordinance.

8.

Section Acting pursuant to the authority of Sections 19-207 and Sections 19-301, et seq. of the Enabling Act and Section I 9-46 of the Charter, the Town hereby determines to borrow money and incur indebtedness for the public purpose of providing interim financing for a portion of the costs of the Project.

9.

Section To evidence the borrowing and indebtedness authorized in Section 8 of this Ordinance, the Town, acting pursuant to the authority of the Enabling Act and the Charter, shall issue and sell, upon its full faith and credit, a general obligation note in the principal amount not to exceed One Million Eight Hundred Twenty-Eight Thousand Dollars ($1,828,000) to be designated "The Town Commissioners of Queenstown General Obligation Note (Water System

Improvement)." There shall be added to the title of the Note a designation coresponding to the year in which the Note is issued and, as appropriate, an additional letter or other designation to distinguish the Note from other indebtedness issued by the Town. The Town may modiff or add such additional designation(s) as it deems appropriate to distinguish the Note or any series thereof.

-5- The Note shall be dated the date of its delivery and shall be issued in the form of a single fully registered note, without coupons attached. The Note shall bear interest at a rate not to exceed 4.50%. The interest on the Note shall be paid in monthly installments on the outstanding principal balance and all principal and accrued interest ontheNote shall be due onthe date of maturity of the Note. The final maturity date of the Note shall be not later than twenty-four (24) months following

the date of issuance of the Note, provided that the maturity date may be extended upon the prior written consent of the President and the registered owner of the Note in the event that completion of the Project or issuance of the Bond is delayed. Prepayments of the Note may be made at the option of the Town without penalty or premium. The Note shall have such other terms and conditions as are set forth in the form of Note included as Exhibit B.

10.

Section The Note shall be executed in the name of the Town and on its behalf by the President. The corporate seal of the Town shall be affixed to the Note, attested by the manual signature of the Clerk-Treasurer. The principal of and interest on the Note shall be paid by the Town by electronic funds transfer (including, without limitation, any pre-authorized debit payment process pursuant to which the Town authorizes payments to be withdrawn electronically from an

account of the Townos on or about the day that principal or interest is due) or check mailed to the registered owner thereof at the address of such owner as it appears on the books kept for the registration of the Note at the office of the Clerk-Treasurer in Queenstown, Maryland. In the event any official whose signature appears on the Note ceases to be an official prior to the delivery of the Note, or shall have become such official after the date of this Ordinance, the Note shall,

nonetheless, be avalid and legally binding obligation of the Town in accordance with its terms.

11.

Section The Note shall be transferable only upon the books kept for that purpose at the office of the Clerk-Treasurer by the registered owner in person or by his duly authorized -6- attorney, upon surrender thereof, together with a written instrument of transfer satisfactory to the Clerk-Treasurer, duly executed by such registered owner or duly authorized attorney 12.

Section Except as provided hereinafter or in a supplemental resolution or resolutions of the Town adopted prior to the issuance of the Note, the Note shall be issued in substantially the registered note form provided in Exhibit B. Appropriate variations and insertions to the Note shall be made to provide dates, numbers and amounts, and modifications not materially altering the substance of the Note may be made by the President as deemed necessary, appropriate or

convenient. All of the covenants contained in the form of Note attached hereto as Exhibit B are hereby adopted by the Town as and for the form of obligation to be incurred by the Town, and the covenants and conditions contained therein are hereby made binding upon the Town, including the promise to pay therein contained.

13.

Section The Note shall be sold at private, negotiated sale for cash atpar, to the Bank, public advertisement and sale of the Note not being required by the terms of the Enabling Act or the Charter and the best interests of the Town being hereby declared to be served by such private sale. The President is expressly authorized and empowered to take any and all action necessary or appropriate to complete and close the award, sale and delivery of the Note to the Bank.

Section 14. The

Clerk-Treasurer is hereby designated to receive payment on behalf of the Town of the proceeds of the sale of the Note. Proceeds received or drawn under the Note shall be deposited in the proper accounts of the Town and shall be used and applied by the Town exclusively and solely for the public pu{poses described in this Ordinance. If the proceeds received from the sale of the Note exceed the amount needed for such public purposes, the unexpended

excess shall be applied to prepay a portion of the Note.

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Section 15.

(a) The principal of and interest on the Note and the Bond shall be payable in the first instance from funds received from the imposition and collection of assessments, fees and charges as may be authorized for that purpose by the Town. If, in any fiscal year during which the Note or the Bond may be outstanding, such funds are insufficient promptly to meet debt service requirements on the Note and the Bond, the Town shall lerny or cause to be levied upon all

real and tangible personal property within its boundaries subject to assessment for taxation ad valorem taxes in rate and amount sufficient in each and every fiscal year in which such Note or Bond is outstanding to provide for the prompt payment, when due, of the principal of and interest on each such Note or Bond in each such fiscal year; and if the proceeds from the taxes so levied in any fiscal year should be inadequate for such payment, additional tares shall be levied in the

succeeding fiscal year to make up such deficiency.

(b) The full faith and credit and unlimited taxing power of the Town are hereby

irrevocably and unconditionally pledged to the prompt payment of the principal of and interest on the Note and the Bond as and when the Note and the Bond shall become due and payable and to the ler.y and collection of the taxes hereinabove described as and when such taxes may become necessary in order to provide sufficient funds to pay the debt service requirements on the Note and the Bond. The Town hereby covenants and agrees with the registered owner or owner(s) of the

Note and the Bond, respectively, to ler.y and collect the taxes hereinabove described and to take any fuither action that may be appropriate from time to time during the period that any Note or Bond remains outstanding and unpaid to provide the funds necessary to pay promptly the principal thereof and the interest due thereon. The Town may apply to the payment of the principal of or interest on the any of the Note or the Bond any funds received by it from the State of Maryland or

the United States of America or any governmental agency or instrumentality, or from any other -8- source, if such funds are granted for the purpose of assisting the Town in accomplishing the type of project or projects that the Note or the Bond is issued to finance, and to the extent of any such funds received or receivable in any fiscal year, the taxes hereby required to be levied may be reduced proportionately.

Section 16.

This terms of this Section 16 shall apply solely to the Note and are not applicable to the Bond. (a) The President and the Clerk-Treasurer shall be the officials of the Town responsible for the issuance of the Note within the meaning of Section 1.148-2 of the Arbitrage Regulations (defined below). The President and the Clerk-Treasurer shall also be the officials of the Town responsible for the execution and delivery on the date of the issuance of the Note of a

certificate or certificates of the Town (a "Tax and Section 148 Certificate") that complies with the requirements of Section 148 of the Internal Revenue Code of 1986, as amended ("Section 148"), and the applicable regulations thereunder (the "Arbitrage Regulations"), and such officials are hereby authorized and directed to execute and deliver a Tax and Section 148 Certificate to counsel rendering an opinion on the validity of the Note on the date of issuance of the Note.

(b) The Town shall set forth in the Tax and Section 148 Certifrcate its

reasonable expectations as to relevant faces, estimates and circumstances relating to the use of the proceeds of the Note or of any monies, securities or other obligations on deposit to the credit of any account of the Town that may be deemed to be proceeds of the Note pursuant to Section 148 or the Arbitrage Regulations (the "Note Proceeds"). The Town covenants that the facts, estimates and circumstances set forth in the Tax and Section 148 Certificate will be based on the Town's

reasonable expectations on the date of the issuance of the Note and will be, to the best of the certiffing officials' knowledge, true and correct as of that date.

-9- (c) The Town covenants and agrees with the registered owner(s) of the Note that it will not make, or (to the extent that it exercises control or direction) permit to be made, any use of the Note Proceeds that would cause the Note to be an "arbitrage bond" within the meaning of

Section 148

and the Arbitrage Regulations. The Town further covenants that it will comply with

Section 148

and the Arbitrage Regulations which are applicable to the Note on the date of issuance thereof and which may subsequently be made applicable thereto as long as the Note remains outstanding and unpaid. The President and the Clerk-Treasurer are hereby authorized and directed to prepare or cause to be prepared and to execute any certification, opinion or other document, including, without limitation, a Tax and Section 148 Certificate, which may be required to assure

that the Note will not be deemed to be an "arbitrage bond" within the meaning of Section 148 and the Arbitrage Regulations. All officers, employees and agents of the Town are hereby authorized and directed to take such actions, and to provide such certifications of facts and estimates regarding the amount and use of the proceeds of the Note as may be necessary or appropriate from time to time to comply with, or to evidence the Town's compliance with, the covenants set forth in this

Section.

(d) The Town further covenants that it shall make such use of the proceeds of

the Note, regulate the investment of the proceeds thereof, and take such other and further actions as may be required to maintain the excludability from gross income for federal income tax purposes of interest on the Note.

(e) The Town further covenants with the registered owner(s) of the Note (i) that it will not take any action or (to the extent that it exercises control or direction) permit any action to be taken that would cause the Note or a portion thereof to be "federally guaranteed" within the meaning of Section la9@) of the Internal Revenue Code of 1986, as amended (the "Code"), and -l 0- (ii) that it will not make, or (to the extent that it exercises control or direction) permit to be made,

any use of the proceeds of the Note or a portion of such proceeds that would cause the Note or a portion thereof to be a"private loan bond" within the meaning of Section lal(c) of the Code.

(f) The President may make such covenants or agreements in connection with

the issuance of the Note as he shall deem advisable to assure the registered owner or owners of the Note that interest thereon shall be and remain excludable from gross income for federal income tax purposes, ffid such covenants or agreements shall be binding on the Town so long as the observance by the Town of any such covenants or agreements is necessary in connection with the maintenance of the exclusion of the interest on the Note from gross income for federal income tax

pu{poses. The foregoing covenants and agreements may include such covenants or agreements on behalf of the Town regarding compliance with the provisions of the Internal Revenue Code of 1986, as amended, as the President shall deem advisable in order to assure the registered owner or owners of the Note that the interest thereon shall be and remain excludable from gross income for federal income tax purposes, including (without limitation) covenants or agreements relating to the

investment of Note Proceeds, the payment of certain earnings resulting from such investment to the United States, limitations on the times within which, and the purpose for which, Note Proceeds may be expended, or the use of specified procedures for accounting for and segregating Note Proceeds. Such covenants and agreements may be set forth in a Tax and Section 148 Certificate.

(g) The Town is authorized to designate the Note as bank qualified under

Section

265(bX3) of the Code.

(h) The Town hereby declares its intention to use a portion of the proceeds of

the Note to reimburse itself for certain costs of the Project that will be paid before the date of -l l- issuance of the Note to the extent allowed under the Code and the applicable regulations thereunder, including Treasury Regulation Section I .150-2.

Section 17. The

President of the Town and any other authorized official of the Town are hereby authorized to enter into any additional certificates, documents or agreements which they deem to be necessary or desirable in order to carry out the provisions of this Ordinance.

-12- J1lb fl arh This Ordinance was read and passed this day of ,2025.

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THE TOWN COMMISSIONERS OF

QUEENSTOWN

/ 4' " - Alton Hardee. Jr.. President I Commissioner Thomas B. Willis. Jr.. Commissioner

ATTEST:

-t 3-

EXHIBIT A

FORM OF BOND

R-1

REGISTERED

UNITED STATES OF AMERICA

STATE OF MARYLAND

THE TOWN COMMTSSTONERS OF QUEENSTOWhI

GENERAL OBLIGATION BOND

(WATER SYSTEM TMPROVEMENT)

II

Dated: _)2021)

PAYMENTS OF PRINCIPAL OF AND INTEREST ON THIS BOND ARE MADE BY

ELECTRONIC FUNDS TRANSFER TO THE REGISTERED OWIIER AND IT CANNOT

BE DETERMINED FROM THE FACE OF THIS BOND WHETHER ALL OR ANY PART

OF THE PRINCIPAL OF OR INTEREST ON THIS BOND HAS BEEN PAID

THE TOWN COMMISSIONERS OF QUEENSTOWN, a body politic and corporate and a municipal corporation of the State of Maryland (the "Town"), hereby acknowledges itself indebted and for value received promises to pay to the TJNITED STATES OF AMERICA, acting through Rural Utilities Service, United States Department of Agriculture ("USDA"), the registered owner, the principal amount of Dollars ($ ) plus interest on the unpaid principal

balance from the date hereof at the rate of _% per annum. The principal of and interest on this bond shall be paid in quarterly installments of Dollars ($ t on the day of , _ and the day of _, , _ and-thereafteruntiltheprincipalofandinterestonthisbondarefullypaid,exceptthatthe final installment of the entire indebtedness evidenced by this bond, if not sooner paid, shall be payable on and except that prepayments may be made as provided below. Each

and every quarterly installment shall include a payment of a portion of the principal of this bond.

Both the principal of and interest on this bond will be paid in lawful money of the United States of America, at the time of payment, and will be paid by electronic funds transfer (including, without limitation, any pre-authonzed debit payment process pursuant to which the Town authorizes payments to be withdrawn electronically from an account of the Town's on or about the day that principal or interest is due) or check or draft (by depositing such check or draft, correctly

addressed and postage prepaid, in the United States of America mails on or before the payment date) mailed to the registered owner hereof at the address as it appears on the books kept for the -14- registration and registration of transfers of the bond at the office of the Clerk-Treasurer to the Commissioners of the Town (the "Clerk-Treasurer") in Queenstown, Maryland.

This bond is issued pursuant to and in full conformity with the provisions of Sections 19- 207 and Sections 19-301, et seq. of the Local Government Article of the Annotated Code of Maryland (2013 Replacement Volume, as €unended) (the "Enabling Act"), Section 19-46 of the Charter of the Town (the "Charter"), and by virtue of due proceedings had and taken by the Commissioners of the Town (the "Commission"), particularly an Ordinance adopted on

, 2025 (the "Ordinance").

The principal of and interest on this Bond arc payable in the first instance from funds received by the Town from the imposition and collection of certain assessments, fees, and charges as may be authorized for that pu{pose by the Commission. To the extent that such funds are insufficient to pay the principal of or interest on this Bond when due, the Town has covenanted in the Ordinance to levy upon all real and tangible personal property within its boundaries subject to

assessment for unlimited taxation, ad valorem taxes in rate and amount sufficient in each year in which this Bond is outstanding to provide for such payments. If the proceeds from the taxes so levied in any fiscal year should be inadequate for such purpose, the Town has covenanted to levy additional taxes in the succeeding fiscal year to make up any deficiency.

The full faith and credit and unlimited taxing power of the Town are hereby inevocably pledged to the prompt payment of the principal of and interest on this bond according to its terms, and the Town does hereby covenant and agree to pay punctually the principal of and interest on this bond at the dates and in the manner prescribed herein.

This Bond is transferable only upon the books of the Town at the office of the Clerk- Treasurer by the registered owner hereof in person or by his attorney duly authorized in writing, upon surrender hereof, together with a written instrument of transfer satisfactory to the Clerk- Treasurer, duly executed by the registered owner or his duly authorized attorney. At the expense of any transferor other than the United States of America, the Town shall, within a reasonable time,

issue in the name of the transferee a new registered bond or bonds, in denominations of one Thousand Dollars ($1,000.00) or any integral multiple thereof or such other denominations as the Commission shall by ordinance approve, in an aggregate principal amount equal to the unpaid principal amount of the bond or bonds surrendered and with the same maturities and interest rate.

If more than one bond is issued upon any such transfer, the installment of principal and interest to be paid on each such bond on each payment date shall be equal to the product of the following formula: the total installment due on each payment date multiplied by a fraction, the numerator of which shall be the unpaid principal amount of such bond and the denominator of which shall be the aggregate principal amount of bonds then outstanding and unpaid. Except for transfers made by

the United States of America, the new bond or bonds shall be delivered to the transferee only after payment of any taxes on and any shipping or insurance expenses relating to such transfer. The Town may deem and treat the party in whose name this Bond is registered as the absolute owner hereof for the pulpose of receiving payment of or on account of the principal hereof and interest due hereon and for all other purposes.

-l 5- The Town has the right to prepay scheduled installments, or any portion thereof, at any time atpar without premium or penalty in accordance with the rules and regulations of the USDA.

It is hereby certified and recited that all conditions, acts and things required by the statutes of the State of Maryland, the Enabling Act, the Chaner of the Town and the Ordinance to exist, to have happened or to have been performed precedent to or in the issuance of this Bond, exist, have happened and have been performed, and that the issuance of this bond together with all other indebtedness of the Town, is within every debt and other limit prescribed by said statutes.

[Remainder of page left blank intentionally] -16- IN WITNESS WHEREOF, this bond has been executed by the manual signature of the President of the Commissioners of the Town Commissioners of Queenstown and the corporate seal of the Town has been affixed hereto, attested by the manual signature of the Clerk-Treasurer, all as of the day of _,202-.

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ATTEST:

THE TOWN COMMISSIONERS OF

QUEENSTOWN

By:

Clerk-Treasurer President of the Commissioners of The Town Commissioners of Queenstown (Form of Transfer) FOR VALUE RECEIVED. hereby sells, assigns and transfers the within bond to and hereby authorizes the Clerk-Treasurer to The Town Commissioners of Queenstown to transfer this bond on the books of the Town.

(sEAL) Dated:

Witness:

-1 8-

PAYMENT GRID

Principal Principal Holder's Date of Pavment Amount Paid Amount Outstandine Signature -19-

EXHIBIT B

FORM OF NOTE

[THIS NOTE HAS BEEN DESIGNATED AS "BANK QUALIFIED TAX EXEMPT''

UNDER SECTTON 265(B)(3) OF THE TNTERNAL REVENUE CODE OF 1986, AS

AMENDED.I

IT CANNOT BE DETERMINED FROM THE FACE OF THIS NOTE WHETHER

A PART OF THE PRINCIPAL OF THIS NOTE HAS BEBN PAID

REGISTBRBD

UNITED STATES OF AMERICA

STATE OF MARYLAND

THE TOWN COMMISSTONERS OF QUEENSTOWII

GBNERAL OBLIGATION NOTE

(WATBR SYSTBM IMPROVBMENT)

II

Reference Date Maturitv Date 202 202 l- Holder: I THE TOWN COMMISSIONERS OF QUEENSTOW-N, a body politic and corporate and a municipal corporation of the State of Maryland (the "Town"), hereby acknowledges itself indebted and for value received promises to pay to Queenstown Bank and its successors and assigns (the o'Holder"), the maximum principal amount of Dollars ($ ) (or such lesser amount as shall be outstanding hereunder from time to time), plus interest on the outstanding

and unpaid principal balance from the date hereof at the rate of percent (_"1"). Interest on the Note shall be paid on the day of each month commencing .

The outstanding and unpaid principal on this Note shall be paid on together with interest on the Note accrued and unpaid to that date.

The full faith and credit and unlimited taxing power of the Town are hereby unconditionally pledged to the payment of this Note and of the interest payable hereon according to its terms, ffid the Town does hereby covenant and agree to pay punctually the principal of this Note and the interest hereon on the dates and in the manner prescribed herein, according to the true intent and meaning hereof. The Town has covenanted in the Ordinance to l"l.y upon all real and tangible

personal property within its boundaries subject to assessment for unlimited taxation ad valorem taxes in rate and amount sufficient in each year in which this Note is outstanding to provide for such payments. If the proceeds from the taxes so levied in any fiscal year should be inadequate for -20- such pu{pose, the Town has covenanted to levy additional taxes in the succeeding fiscal year to make up any deficiency.

l.

Ordinance This Note is issued pursuant to and in full conformity with the provisions of Sections 19- 301, et seq. of the Local Government Article of the Annotated Code of Maryland (2013 Replacement Volume, as amended) (the "Enabling Act"), Section 19-46 of the Charter of the Town (the "Charter"), and by virtue of due proceedings had and taken by the Commissioners of the Town (the "Commission"), particularly an Ordinance adopted on , 2025 (the "Ordinance").

The terms of this Note include those stated in the Ordinance, and this Note is subject to all such terms. The registered owner of this Note is referred to the Ordinance (a copy of which is on file with the Town) for a complete statement of such terms, to which the owner hereof, by acceptance of this Note, assents.

2.

Interest.

This Note shall bear interest at the rate of _% per annum. All interest on this Note shall be calculated on a [3651365] basis by applying the ratio of the interest rate over a year of 365 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.

3.

Method of Payment.

The principal of and interest and premium (if any) on this Note will be payable by electronic funds transfer or check mailed to the Registered Owner or by wire transfer to the Registered Owner's account, as specified by the Registered Owner upon at least five days'written notice to the Town, provided that the final payment of the principal hereof shall be payable upon presentation and surrender of this Note to the Town. The principal of and interest and premium (if

any) on this Note will be paid in any money of the United States that at the time of payment is legal tender for payment of public and private debts or by checks payable in such money. If any payment of the principal of or interest on this Note is due on a day that is not a Business Day, such payment will be made on the next Business Duy, provided that interest will accrue on the amount of such payment during the intervening period. "Business Day" means any day other than a

Saturday, Sunday or day on which banking institutions under the laws of the state of Maryland are authorized or obligated by law or required by executive order to remain closed. Upon receipt of each payment or prepayment of principal on this Note, the Registered Owner shall make a notation indicating the principal amount paid or prepaid and the date thereof on the Payment Grid attached hereto. For all purposes, the principal amount of this Note outstanding at any time shall be equal to

the Principal Sum shown above reduced by the principal amount of so paid or prepaid. The failure of the Registered Owner to note the principal amount of any such payment or prepayment on the Payment Grid attached hereto, or any inaccuracy therein, shall not affect the payment obligation of the Town hereunder. THEREFORE, IT CANNOT BE DETERMINED FROM THE FACE OF THIS NOTE WHETHER A PART OF THE PRINCIPAL OF THIS NOTE HAS BEEN PAID.

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4. Prepayment.

This Note shall be subject to prepayment at the option of the Town, without penalty or premium.

5. Line of Credit.

This Note evidences a straight line of credit. Once the maximum principal amount has been advanced, the Town is not entitled to further loan advances. Advances under this Note may be requested orally by the Town, as provided in this section or as otherwise agreed by the Holder. All oral requests shall be confirmed in writing on the day of the request. All communications, instructions, or directions by telephone or otherwise to the Holder are to be directed to the Holder

at [710] Main Street, P.O. Box 120, Queenstown, Maryland 21658], or such other address as is communicated by the Holder of this Note. Holder shall have no obligation to advance sums under this Note if there is a default by the Town under the terms of this Note or any other agreement between the Town and the Holder hereof relating to the loan evidenced by the Note. Upon a default in payment of any amounts due hereunder, the Holder shall have the right to accelerate and demand

payment of all amounts then due hereunder. Upon a default in the payment of any amounts due hereunder, the Town agrees to pay to the Holder all costs incurred by the Holder in seeking collection of amounts owed hereunder including but not limited to reasonable attorneys' fees and court costs.

6. Extension of Maturitv.

The Maturity Date of this Note may be extended upon the prior written consent of the President and the Holder in the event that completion of the Project (as defined in the Ordinance) or perrnanent financing therefor is delayed.

7.

Modifications.

Modifications or alterations of the Note may be made only to the extent and in the circumstances permitted by the Ordinance.

8.

Persons Deemed Owners.

The Registered Owner of this Note shall be treated as the owner and holder of this Note for all purposes.

9. Notices.

When the Town is required to give notice to the owner of this Note, such notice shall be mailed by first-class mail to the Registered Owner of this Note at such Registered Owner's address as it appears on the registration books maintained by the Town. Any notice mailed as provided herein will be conclusively presumed to have been given, whether or not actually received by the addressee.

-22- All acts, conditions and things required by the Constitution and laws of the State of Maryland and the rules and regulations of the Town to happen, exist and be performed precedent to and in the issuance of this Note and the execution and delivery of the Ordinance have happened, exist and have been performed as so required.

No recourse shall be had for the payment of the principal of and interest on this Note or for any claims based thereon or on the Ordinance against any member or other officer of the Town or any person executing this Note, all such liability, if any, being expressly waived and released by the Registered Owner by the acceptance of this Note.

[Remainder of page left blank intentionally] -23- IN WITNESS WHEREOF, this Note has been executed by the manual signature of the President of the Commissioners of the Town Commissioners of Queenstown and the corporate seal of the Town has been affixed hereto, attested by the manual signature of the Clerk-Treasurer, all as of the Dated Date.

lsEALl

ATTEST:

THE TOWN COMMISSIONERS OF

QUEENSTOWN

By:

Clerk-Treasurer President of the Commissioners of The Town Commissioners of Queenstown

PAYMENT GRID

Principal Principal Holder's Date of Pavment Amount Paid Amount Outstandine Sienature

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