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HomeMy WebLinkAboutTax Anticipation Note SWMDNo. PRINCIPAL SUM: INTEREST RATE: DATE OF ISSUE: MATURITY DATE: $300,000 UNITED STATES OF AMERICA STATE NEW YO' COUNTY OF SUFFOLK TOWN OF SOUTHOLD TAX ANTICIPATION NOTE-2009 ED THOUSAND DOLLARS $300,000 THREE HUNDR ( ) ninety-five hundredths of one per centum (.95%) per annum December 15, 2009 February 15, 2010 The Town of Southold, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted mid for value received promises to pa5' to Bridgehampton National Bank, Bridgehampton, New York, the registered owner hereof, the PRINCIPAL SUM (stated above) on the MATURITY DATE (stated above), together with interest thereon from the DATE OF ISSUE (stated above) at the INTEREST RATE (stated above), payable at maturity. Both principal of and interest on this Note will be paid in lawful money of the United States of America, at Bridgehampton National Bank, Bridgehampton, New Yorlc Both principal of and interest on this Note shall be payable only to the registered owner, his legal representatives, successors or transferees. Ttlis Note shall then be transferable only upon presentation to such Tovm Clerk with a wri~en transfe~ of title and such Town Clerk shall thereupon register fids Note in the name of the transferee in his hooks and shall endorse a certificate of such registration hereon. Such transfer shall be dated, and signed by the registered owner, or his legal representatives, and it shall be duly acknowledged or proved, or [ti the alternative the signature thereta shall be cerhfied as to its genuineness by an officer of a bank or trust company located and authorized to do business in fids State, This Note is the only Note of an authorized issue, the principal amount of which is $300,000. This Note is issued pnrsuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated La~vs of the State of New York, the Tax Anticipahan note resolution adopted by the Town Board on November 17. Certificate of Determination executed by the Supervisor as of December 15, 2009. This Note has bean designated by the Town as a qualified tax-exempt obligation pursuant to the provisions of Section 265 of the Internal Revenue Code of 1986, as amended The faith and credit of such To~ am hereby irrevocably pledged for the punctual payment of the principal of and interest on this Note according to its temls. It is hereby certified and recited that all conditions, acts and things required by the Constituhan and statutes of the State of New York to exist, to have happened and to have been performed precedent to and in the issuance of this Note, exist, have happened and have been performed, and that this Note, together with all other indebtedness of ~uch Tov~n~ i~ w/thin e~,ery debt a~d other limit prescribed by the Constitntin~ of such State. IN WITNESS WHEREOF, the Town of Southold has caused this Note to be signed by its Supervisor, and its corporate seal (or a facsimile thereof) to be affixed, impressed, imprinted or otherwise reproduced hereon and attested by its Town Clerk and this Note to be dated as of the DATE OF ISSUE. (SEAL) ATTEST.:.' ' d Town Clerk TOWN OF S~OLD Supervisor REGISTRATION CERTIFICATE It is hereby certified that the within Note has been registered as follows: Date of Registration Name of Registered Holder Registered by 573419.1 031686 CERT No. 1 $300,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD TAX ANTICIPATION NOTE-2009 PRINCIPAL SUM: INTEREST RATE: DATE OF ISSUE: MATURITY DATE: THREE HUNDRED THOUSAND DOLLARS ($300,000) ninety-five hundredths of one per centum (.95%) per annum December 15, 2009 February 15, 2010 The Town of SouthoId, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to Bridgehampton National Bank, Bridgehampton, New York, the registered owner hereof, the PRINCIPAL SUM (stated above) on the MATURITY DATE (stated above), together with interest thereon from the DATE OF ISSUE (stated above) at the INTEREST RATE (s~ated above), payable at maturity. Both principal ofund interest on this Note will be paid in lawful money of the United States of America, at Bridgehampton National Bank, Bridgehampton, New York Both principal of and interest on this Note shall be payable only to the registered ov~er, his legal representatives, successors or h'ansferees. This Note shall then be transferable only upon presentation to such Town Clerk with a written transfc~ of hthi and such Town Clerk shall thereupon register this Note in the name of the transferee in his books and shall endorse a certificate of such registration hereon. Such transfer shall be dated, and signed by the registered owner, or his legal representatives, and it shall be duly acknowledged or proved, or in the alternative the signature thereto shall be certified as to its genuineness by an officer ora bank or trust company located and authorized to do business in this State. This Note is the only Note of an authorized issue, the principal amount of which is $300,000. This Note is issued pursuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York, the Tax Anticipation note resolution adopted by the Town Board on November 17 Certificate of Determination execu~d by the Supervisor as of December 15, 2009. This Note has been designated by the Town as a qualified tax-exempt obligation pursuant to the provisions of Section 265 of the Internal Revenue Code of 1986, as amended. The faith and credit of such Town am hereby irrevocably pledged for the punctual payment of the principal of and interest on this Note according to its terms. It is hereby certified and recited that all conditions, acts and things required by the Constitution and statutes of the State of New York to exist, to have happened and to have been performed precedent to and in the issuance of this Note, exist, have happened and have been performed, and that this Note, together with all other indebtedness of such Town, is within every debt and other limit prescribed by the Constitution of such State. IN WITNESS WHEREOF, the Town of Southold has caused this Note to be signed by its Supervisor, and its corporate seal (or a facsimile thereof) to be affixed, impressed, imprinted or otherWtse reproduced hereon and attested by its Town Clerk and this Note to be dated as of the DATE OF ISSUE. (SEAL) ATTEST.' ~ , Town Cl~k TOWN OF S~OLD Supervisor CERTIFICATE OF DETERMINATION BY THE SUPERVISOR RELATIVE TO AUTHORIZATION, SALE, ISSUANCE, FORM AND CONTENTS OF THE $300,000 TAX ANTICIPATION NOTE-2009 OF THE TOWN OF SOUTHOLD, NEW YORK I, Scott A. Russell, Supervisor of the Town of Southold, New York (herein called the "Town"), HEREBY CERTIFY that pursuant to the powers and duties delegated to me, the chief fiscal officer of the Town, by the Town Board of the Town, pursuant to the tax anticipation note resolution duly adopted and as referred to in paragraph 1 hereof, and subject to the limitations prescribed in said resolution, I have made the following determinations: 1. A tax anticipation note (the "Note") of the Town in the principal amount of $300,000 shall be issued pursuant to the Tax Anticipation note resolution entitled: "Tax anticipation note resolution of the Town of Southold, New York, adopted November 17, 2009, authorizing the issuance of $300,000 tax anticipation notes in anticipation of the receipt of taxes or assessments levied or to be levied on behalf of the Town of Southold Solid Waste Management District for the fiscal year ending December 31, 2010," duly adopted by the Town Board on the date therein referred. 2. The terms, form and details of said Note shall be as follows: Amount and Title: Dated: Mature: Interest Rate per annum: Number and Denomination: Form of Note: $300,000 Tax Anticipation Note-2009 December 15, 2009 February 15, 2010 .95% Number 1, at $300,000 Substantially in accordance with form prescribed by Schedule B, 2 of the Local Finance Law of the State of New York. 3. Said Note is not issued in renewal of any note or notes. 4. The amount of tax anticipation notes heretofore issued pursuant to the resolution hereinabove cited in paragraph 1 hereof, is $-0-. 5. Pursuant to said powers and duties delegated to me, I DO HEREBY AWARD AND SELL said Note to Bridgehampton National Bank, Bridgehampton, New 573419 I 031686 CERT York, for the purchase price of $300,000, plus accrued interest, if any, from the date of said Note to the date of delivery thereof, payable to Bridgehampton National Bank, as registered owner, and I FURTHER DETERMINE that said Note shall be payable as to both principal and interest at Bridgehampton National Bank, Bridgehampton New York and shall bear interest at the rate of ninety-five hundredths of one per centum (.95%) per annum, payable at maturity or prior redemption. 6. Said Note shall be executed in the name of the Town by its Supervisor and the corporate seal of the Town or a facsimile thereof shall be affixed, impressed, imprinted or otherwise reproduced thereon and attested by its Supervisor. I HEREBY FURTHER CERTiFY that the powers and duties delegated to me to issue and sell the Note hereinabove referred to are in full force and effect and have not been modified, amended or revoked. 1N WITNESS WHEREOF, I have hereunto set my hand as of the 15th day of December, 2009. Supervisor 573419. I 031686 CERT CLERK'S CERTIFICATE I, Elizabeth A. Neville, Town Clerk of the Town of Southold, in the County of Suffolk, New York, HEREBY CERTIFY that I have compared the foregoing copy of the Certificate of Determination executed by the Supervisor and the same is a true and complete copy of the Certificate filed with said Town in my office as Town Clerk on or before the 15th day of December, 2009; and I FURTHER CERTIFY that no resolution electing to reassume any of the powers or duties mentioned in said Certificate and delegated to the Supervisor by the resolution cited in said Certificate has been adopted by said Town Board. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of said Town as of the 15th day of December, 2009. (SEAL) O - 5-own clerk - 573419.1 031686 CERT AFFIDAVIT AS TO NO CONFLICT OF INTEREST STATE OF NEW YORK ) ~SS~ COUNTY OF SUFFOLK ) Elizabeth A. Neville, being duly sworn upon her oath deposes and says: 1. I am the duly appointed, qualified and acting Town Clerk of the Town of Southold, in the County of Suffolk, New York (herein and in Schedule A annexed hereto called "Town"); 2. That with respect to the contract of sale of the Note of the Town described in the Certificate of Determination executed by the Supervisor as of the 15th day of December, 2009, to the financial institution indicated in such Certificate, I have made a careful inquiry of each officer and employee of the Town having the power or duty to (a) negotiate, prepare, authorize or approve the contract or authorize or approve payment thereunder, (b) audit bills or claims under the contract, or (c) appoint an officer or employee who has any of the powers or duties set forth above, as to whether or not such officer or employee has an interest (as defined pursuant to Article 18 of the General Municipal Law) in such contract; 3. That upon information and belief, as a result of such inquiry, no such officer or employee has any such interest in said contract unless otherwise noted in Schedule A annexed hereto and by this reference made a part hereof Town Clerk Subscribe_d_and sworn to before me t hisc~ay~ec~9' ~'~ary Public, State of New York · ,'~qN A CUSHI~AN Notary Public, Stalre of' New York No. 01CU61743~22 Qu411fled ~ Suffolk County Commission Exit!res SePtember i?, 20 573419 1 031686 CERT SCHEDULE A I. ., is a stockholder of the Purchaser owning or controlling, directly or indirectly, less than five per centum (5%) of the outstanding stock thereof but no disclosure of such interest by said officer is required pursuant to said Law. 2. , has an interest in the Purchaser solely by reason of employment as an officer or employee thereof, but the remuneration of such employment will not be directly affected as a result of said contract and the duties of such employment do not directly involve the procurement, preparation or performance of any such part of such contract. 3. ., has publicly disclosed the nature and extent of such interest in writing to the governing board ofthe Town. Such written disclosure has been made a part of and set forth in the official record of proceedings of the Town. 573419.1 031686 CERT CERTIFICATES AS TO SIGNATURES, LITIGATION, AND DELIVERY AND PAYMENT WE, the undersigned officers of the Town of Southold, in the County of Suffolk, a municipal corporation of the State of New York (herein referred to as the "Town"), HEREBY CERTIFY that on or before December 15, 2009, we officially signed and properly executed by manual signature the $300,000 Tax Anticipation Note-2009 (the "Note") of the Town, payable to Bridgehampton National Bank, as registered owner and otherwise described in Schedule A annexed hereto and by this reference made a pan hereof, and that at the time of such signing and execution and on the date hereof we were and are the duly chosen, qualified and acting officers of the Town authorized to execute the Note and holding the offices indicated by the title set opposite our signatures hereto for term expiring on the date set opposite such titles. WE FURTHER CERT1FY that no litigation of any nature is now pending or threatened restraining or enjoining the issuance or delivery of said Note or the levy or collection of any taxes to pay the interest on or principal of said Note, or in any manner questioning the authority or proceedings for the issuance of said Note or for the levy or collection of said taxes, or relating to said Note or affecting the validity thereof or the levy or collection of said taxes, that neither the corporate existence or boundaries of the Town nor the title of any of the present officers thereof to their respective offices is being contested, and that no authority or proceedings for the issuance of said Note has or have been repealed, revoked or rescinded WE FURTHER CERTIFY that the seal which is impressed upon this certificate has been affixed, impressed, imprinted or otherwise reproduced upon said Note and is the legally adopted, proper and only official corporate seal of the Town. And I, Scott A. Russell, Supervisor, HEREBY FURTHER CERTIFY that on December 15, 2009, I delivered or caused said Note to be delivered to Bridgehampton National Bank, Bridgehampton, New York, the purchaser thereof, and that at the time of such delivery, the Town received from said purchaser the amount hereinbelow stated, in full payment for said Note, computed as follows: Price .............................................................. $300,000 Interest on said Note accrued to the date of such delivery ......................................... -0- Amount Received ............................................. $300,000 573419.1 031686 CERT 1N WITNESS WHEREOF, we have hereunto set our hands and said corporate seal has hereunto been affixed as of the 15th day of December, 2009. 5ature Term of Office Expires Title December 31, ~o// Supervisor December 31, c~/_5 Town Clerk (SEAL) I HEREBY CERTIFY that the signatures of the officers of the above-named Town, whichaPpear above, are true and genuine and that I know said officers and know them to hold the respective offices set opposite their signatures. (Signa~ur'~ diTitie} of 573419 1 031686 CERT CERTiFICATE OF CORPORATION COUNSEL I, Martin Finnegan, Esq., HEREBY CERTiFY that I am a licensed attorney at law of the State of New York and am the qualified and acting Town Attorney of the Town of Southotd, New York, in the County of Suffolk, a municipal corporation of the State of New York (herein referred to as the "Town"), that to the best of my knowledge and belief no litigation of any nature is now pending or threatened restraining or enjoining the issuance or delivery of the Note of the Town, payable to Bridgehampton National Bank, as registered owner and otherwise described as set forth in Schedule A annexed hereto and by this reference made a part hereof or the levy or collection of any taxes to pay the interest on or principal of said Note, or in any manner questioning the authority or proceedings for the issuance of said Note or for the levy or collection of said taxes, or relating to said Note or affecting the validity thereof or the levy or collection of said taxes, that neither the corporate existence or boundaries of the Town nor the title of any of the present officers thereof to their respective offices is being contested, and that no authority or proceedings for the issuance of said Note has or have been repealed, revoked or rescinded 1N WITNESS WHEREOF, I have hereunto set my hand this 15th day of Decemb~ ~own~4ttorney 573419.1 031686 CERT Amount and Title: Dated: Mature: Number and Denomination: Interest Rate per annum: SCHEDULE A $300,000 Tax Anticipation Note-2009 December 15, 2009 February 15, 2010 No. 1, at $300,000 .95% 573419.1 031686 CERT ARBITRAGE AND USE OF PROCEEDS CERTIFICATE I, Scott A. Russell, Supervisor of the Town of Southold (the "Issuer") in the County of Suffolk, New York, HEREBY CERTIFY with respect to the Issuer's $300,000 Tax Anticipation Note-2009 (hereinafter referred to as the "Note" or "Notes"), dated December 15, 2009, and maturing February 15, 2010, as follows: Unless the context clearly requires otherwise, all capitalized terms used but not otherwise defined herein shall have the meanings set forth in Article II below or in the Resolution, the Code or the Regulations (each as defined in Article II): ARTICLE I General 1.1. Authority of Signatory. I am an officer of the Issuer charged with the responsibility for issuing the Note and am acting for and on behalf of the Issuer in executing this certificate. 1.2. Purpose of Certificate. This certificate is made for the purpose of establishing evidence of the expectations of the Issuer as of the date hereof as to the amount and use of proceeds of the Note. It is intended and may be relied upon for purposes of Sections 103 and 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and as a certification described in Section 1.148-2(b)(2) of the Treasury Regulations. This certificate is being executed and delivered as part of the record of proceedings in connection with the issuance of the Note. The provisions of this certificate constitute a contractual obligation of the Issuer in consideration for the purchase of and payment for the Note by the purchaser(s) thereof 1.3. Reasonable Expectation. This certificate sets forth the facts, estimates and circumstances now in existence which are the basis for the Issuer's expectation that the proceeds of the Note will not be used in a manner that would cause the Note to be arbitrage bonds under Sections 103 and 148 of the Code or private activity bonds under Section 141 of the Code. To the best of my knowledge and belief, such expectation is reasonable and there are no other facts, estimates or circumstances that would materially change that expectation. 1.4. No Composite Issue. No other governmental obligations have been sold fewer than 15 days prior to, or will be sold fewer than 15 days after, the sale date of the Note, pursuant to a common plan of financing which are expected to be paid from substantially the same source of funds as the Note. 1.5. Federal Guarantee of Investments. No portion of the Proceeds of the Note will be invested, directly or indirectly, in federally insured deposits, accounts, or obligations other than investments of a debt service fund or unexpended Note proceeds for an initial temporary period. 1.6. Tax Representation. The Issuer will comply with all the procedures and provisions set forth herein, and will perform all acts and things necessary and desirable within its reasonable control in order to assure that interest paid on the Note shall, for the purpose of federal income taxation, be excluded from gross income, including seeking and adhering to the 573419,1 031686 CERT advice of bond counsel in the event that it experiences significant deviations from the projections set forth herein as to revenues and expenditures for the current calendar year. 1.7. Additional Information. The Issuer will provide such other additional information as may be required to assure the exclusion from gross income of interest on the Note for federal income taxation purposes. 1.8. Bank Qualification. The Note is hereby designated by the Issuer under Section 265(b)(3) of the Code as qualified tax-exempt obligations. For this purpose qualified tax-exempt obligation means tax-exempt obligations which are not private activity bonds, as defined in section 141 of the Code ("Private Activity Bonds"); are designated by the issuer as qualified tax-exempt obligations under Section 265(b)(3); and are issued by an issuer who does not reasonably anticipate to issue more than $30,000,000 in aggregate principal amount of obligations (not including current refundings of outstanding designated/qualified tax-exempt obligations) during the current calendar year the interest on which is excludable under section 103 of the Code from federal income taxes. 1.8. IRS Form 8038-G. The Issuer shall file IRS Form 8038-G by the 15th day of the second month after the calendar quarter in which the Note is issued. ARTICLE II Definitions "Available Amount" means monies in accounts of the Issuer or any member of the Issuer's Controlled Group to the extent that such monies may, without legislative or judicial action, be invaded to pay expenditures of the type that will be financed with the Note proceeds without a legislative, judicial or contractual requirement that such accounts be reimbursed. "Bond Year" means each 1 year period (or shorter period) from the date of issue that ends at the close of business on the day in the calendar year selected by the Issuer which day is the last day within one year of the dated date of the Note. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means any Installment Computation Date or the Final Computation Date. "Computation Date Credit" means, for any issue of obligations, an amount equal to the Future Value of $1,000 for each Bond Year during which there are gross proceeds of the Bonds on a Computation Date other than the Final Computation Date, and $1,000 on the Final Computation Date. "Computation Period" means the period beginning on the day following a Computation Date (or in the case of the first period, the date of issuance of the Note) and ending on the next succeeding Computation Date. "Controlled Group" means a group of entities controlled directly or indirectly by the same entity or group of entities. In general, "direct control" exists while a controlling 573419.1 031686 CERT entity possesses either of the following rights or powers and such rights or powers are discretionary and non-ministerial: The right or power (i) both to approve and to remove without cause a controlling portion of the governing body of the controlled entity, or (ii) to require the use of funds or assets of the controlled entity for any purpose of the controlling entity. If one entity (the "Controlling Entity") directly controls another (the "Controlled Entity"), then the Controlling Entity indirectly controls any entity controlled directly or indirectly by such Controlled Entity. However, an entity is not a Controlled Entity if it possesses substantial taxing, eminent domain and police powers. "Debt Service Exception" means an exception to the Proceeds-Spent-Last-Rule applicable to proceeds used to pay debt service on prior issues. "De Minimis Exception" means an exception to the Proceeds-Spent-Last-Rule applicable to expenditures to pay: costs of issuance; Qualified Administrative Costs within the meaning of Treas. Reg. Sections 1.145-5(e)(2) or 1 148-5(e)(3); qualified guarantee or qualified hedge fees within the meaning of Treas. Reg. Sections 1.148-4(0 and 148-4(h); capitalized interest within the meaning of Treas. Reg. Section 1.148- 6(d)(3)(ii)(3); amounts paid to the United States for rebate or to reduce yield on Nonpurpose Investments as provided, respectively, within the meaning of Treas. Reg. Sections 1. 148-3 and 1.148-5(c); noncapital expenditures directly related to capital projects and not in excess of 5% of the sale proceeds of an issue; principal or interest on an issue paid from unexpected excess Sale Proceeds or Investment Proceeds; or principal or interest on an issue paid from investment earnings on a reserve fund transferred to a bona fide debt service fund; "Extraordinary Item Exception" means an exception to the Proceeds-Spent~ Last-Rule applicable to expenditures to pay Extraordinary Working Capital Items. "Extraordinary Working Capital Item" means expenditures for extraordinary, nonrecurring items that are not customarily payable from current revenues, such as casualty losses or extraordinary legal judgments in amounts in excess of reasonable insurance coverage. "Fair Market Value" of an Investment shall have the following meanings: (a) In Genera[ Except as elsewhere specifically stated below, the Fair Market Value of an Investment is the price at which a willing buyer would purchase the Investment from a willing seller in a bona fide, arm's -length transaction. (b) United States Treasury_ Obligation. The Fair Market Value of a United States Treasury Obligation that is purchased directly from the United States Treasury is its purchase price. 573419.1 031686 CERT (c) Certificate of Deposit. The Fair Market Value of a certificate of deposit with a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal is its purchase price provided, the yield on the certificate of deposit is not less than (i) the yield on reasonably comparable direct obligations of the United States and (ii) the highest yield published by the provider and currently available from the provider on reasonably comparable certificates of deposit offered to the public. (d) Guaranteed Investment Contracts. The Fair Market Value of a guaranteed investment contract is its purchase price, provided (i) the State makes a bona fide solicitation for such contract and receives at least three bona fide bids from providers with no material interest in the issue; (ii) the State purchases the highest-yielding guaranteed investment contract for which a qualifying bid is made (determined net of broker's fees); (iii) the yield on such contract (determined net of broker's fees) is not less than the yield then available from the provider on reasonably comparable investment contracts, if any, offered to other persons from a source of funds other than gross proceeds of tax-exempt bonds; (iv) the determination of the terms of a guaranteed investment contract takes into account as a significant factor the Issuer's reasonably expected drawdown schedule for amounts to be invested, exclusive of float and reserves, (v) the terms of the contract, including collateral security requirements are reasonable, and (vi) the obligor certifies the administrative costs it is paying to third parties in connection with the contract. To the extent that a broker's commission does not exceed .05 percent of the amount expected to be invested per year, it may be taken into account in determining yield, with the effect that it will increase the payments for, or decrease the receipts from, Investments. "Final Computation Date" means the day the last Note that is part of this issue is discharged. "Future Value" or "FY" of a payment or receipt means the amount, determined by using the economic accrual method (the method of computing yield based on the compounding of interest at the end of each compounding period), equal to the value of such payment or receipt at the time it is paid or received (or treated as paid or received), plus interest assumed to be earned and compounded over the period at a rate equal to the yield on the issue, using the same compounding interval and financial conventions used to compute yield. "Governmental Bonds" means bonds or Note which are not Private Activity Bonds. "Gross Proceeds" means Proceeds and Replacement Proceeds of an issue. "Installment Computation Date" means the last day of the fifth Bond Year and the last day of each succeeding fifth Bond Year (until and excluding the Final Computation Date) and, if the Issuer so elects, the last day of any Bond Year. "Investment" means (i) any security (within the meaning of Section 165(g)(2)(A) or (B), (ii) any obligation (other than tax-exempt obligations which are not "specified private activity bonds" within the meaning of Section 57(a)(5)(C) of the Code), (iii) any annuity contract 573419.1 031686 CERT within the meaning of Section 72 of the Code, (iv) any residential real property for family units not located within the jurisdiction of the Issuer and which is not required to implement a court- ordered or approved housing desegregation plan or (v) any investment-type property that is held as a passive vehicle for the production of income, including any prepayment for property or services if a principal purpose of prepaying is to receive an investment return from the time the prepayment is made until the time payment would otherwise be made. "Investment Proceeds" means amounts actually or constructively received from the investment or reinvestment of Sale Proceeds. "Issue Date" means this December 15, 2009, the date the Note is being delivered to the public. "Issue Price" means, with respect to the Note, the first price at which a substantial amount (10%) of the Note is sold to the public (not including bond houses or brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers), or if privately placed, the price paid by the first buyer of such obligations. The Issue Price of Note that are publicly offered in a bona fide public offering is determined on the basis of actual facts and reasonable expectations as of the sale date and shall not be adjusted to take into account actual facts after such date. In no event shall the Issue Price ora Note exceed its Fair Market Value as of the sale date. "Issuer" means the Town of Southold, in the County of Suffolk, New York. "Net Proceeds" means, with respect to the Note, the Proceeds of the Note, reduced by amounts in a reserve or replacement fund. "Nonpurpose Investment" means any Investment in which Gross Proceeds are invested and which is not acquired to carry out the governmental purpose of the issue. "Note," "Notes" or "Issue" means the Issuer's $300,000 Tax Anticipation Note- 2009, dated December 15, 2009. "Plain Par Bond or Note" means a qualified tender bond or note or a bond or note that (i) is issued with original issue discount or premium equal to not more than 2 percent of the stated redemption price at maturity plus the amount of original issue premium attributable exclusively to underwriters' compensation, (ii) is issued for a price that does not include accrued interest other than interest that accrues up to one year prior to issuance and is paid within one year afterwards, (iii) bears interest from the issue date at a single stated fixed rate or is a variable rate obligation under Section 1275 of the Code, in either case, that pays interest unconditionally payable at least annually, and (iv) has a lowest stated redemption price not less than its outstanding stated principal amount. "Plain Par Investment" means an investment that is an obligation that (i) is issued with original issue discount or premium, or if acquired on a date other than the issue date, acquired with market discount or premium equal to not more than 2 percent of the stated redemption price at maturity, (ii) is issued for a price that does not include accrued interest other than interest that accrues up to one year prior to issuance and is paid within one year afterwards, 573419.1 031686 CERT (iii) bears interest from the issue date at a single stated fixed rate or is a variable rate obligation under Section 1275 of the Code, in either case, that pays interest unconditionally payable at least annually, and (iv) has a lowest stated redemption price not less than its outstanding stated principal amount~ "Present Value" or "PV" means the amount determined by using the following formula: PV= FV n (l+i) where i equals the discount rate divided by the number of compounding intervals in a year and n equals the sum of(i) the number of whole compounding intervals for the period beginning on the date as of which Present Value is computed and ending on the date the amount is to be received or paid on a Computation Date and (ii) a fraction the numerator of which is the length of any short compounding interval during such period and the denominator of which is the length of a whole compounding interval. "Private Activity Bonds" means bonds or Note which meet the definition contained in Section 141 (a) of the Code and that are not "qualified bonds" as defined in Section 141(e) of the Code. "Proceeds" means any Sale Proceeds, Investment Proceeds and Transferred Proceeds. "Proceeds-Spent-Last-Rule" means the expenditure rule applicable to Restricted Working Capital Expenditures, treating such amounts as expended only after all other Available Amounts are expended. "Qualified Administrative Costs" mean: (a) In General. All reasonable, direct administrative costs, other than carrying costs, such as separately stated brokerage or selling commissions, but not legal and accounting fees, record keeping, custody, and similar costs. General overhead costs and similar indirect costs of the Issuer such as employee salaries and office expenses and costs associated with computing the Rebate Amount are not qualified administrative costs. In general, administrative costs are not reasonable unless they are comparable to administrative costs that would be charged for the same investment or a reasonably comparable investment if acquired with a source of funds other than gross proceeds of tax-exempt bonds. (b) Regulated Investment Companies and External Commingled Funds For publicly offered regulated investment companies (as defined in section 67(c) (2) (B)) and commingled funds in which the Issuer and any Controlled Entity do not own more than 10 percent of the beneficial interest in the fund, Qualified Administrative Costs are all reasonable administrative costs, without regard to the limitation on indirect costs described in the preceding paragraph. 573419 1 031686 CERT (c) GICs. For a guaranteed investment contract, a broker's commission paid on behalf of either an issuer or the provider is a Qualified Administrative Cost to the extent that it does not exceed five one-hundredths of one percent (0.05%) of the amount reasonably expected to be invested per year. (d) Purpose Investments. Qualified Administrative Costs include costs or expenses paid, directly or indirectly, to purchase, carry, sell, or retire the investment; costs of issuing, carrying, or repaying the issue, and any underwriters' discount, which are paid by the conduit borrower, even if such payments merely reimburse the Issuer, but only to the extent the present value of those payments does not exceed the present value of the reasonable administrative costs paid by the Issuer using the yield on the Note as the discount rate. (e) Program Investments. Qualified Administrative Costs include only costs of issuing, carrying, or repaying the issue, and any underwriters' discount, subject to the limitation contained in the preceding paragraph. "Rebate Amount" means with respect to the Note, the amount computed as described in Article V hereo£ "Regulations" means the Income Tax Regulations promulgated under Section ! 48 of the Code by the Department of the Treasury from time to time including the Regulations published on June 18, 1993 in the Federal Register, as they may be amended from time to time. "Replacement Proceeds" means 1) sinking funds and pledged funds (including negative pledges) with respect to the issue, certain other amounts having a sufficiently direct nexus to the Issue to conclude that they would have been used for the purpose for which it was issued if the proceeds of the Issue were not used for that purpose, other amounts treated as arising i£the term of the Issue is longer than necessary for the governmental purposes of the Issue, and (iv) any working capital reserve that is funded with proceeds of the Issue unless the Issue qualifies for the TRAN Expenditure Safe Harbor. "Resolution" means the tax anticipation note resolution adopted by the Town Board on November 17, 2009. "Restricted Working Capital Expenses" means those expenses that are ineligible for the De Minimis Exception, the Extraordinary Item Exception or the Debt Service Exception to the Proceeds-Spent-Last-Rule "Sale Proceeds" means amounts actually or constructively received from the sale or other disposition of the Note but not including amounts used within one year after the date of issue to pay accrued interest. "SLG" means a U.S. Treasury Book Entry Security, State and Local Government Series. "State" means New York. 573419.1 031686 CERT "TRAN Expenditure Safe Harbor" means the safe harbor set forth in Code Section 148(f)(B)(iii) pursuant to which proceeds of issues of tax or revenue anticipation Note ("TRANs") that meet the conditions described in Section 3.5 hereof are deemed spent within six months of the date of issue of the TRANs. "Transferred Proceeds" means proceeds of a prior issue that are allocable to a refunding issue at the time proceeds of the refunding issue are used to pay principal, interest or retirement price of the prior issue "Treasury" means the United States Department of Treasury. "Universal Cap" means the maximum Value of Nonpurpose Investments which may be allocated to the Note, an amount equal to the aggregate Value of all outstanding Note as of any time of determination. Nonpurpose Investments shall be taken into account as Nonpurpose Receipts at their Value on a Valuation Date. "Valuation Date" means the date on which the value of the Universal Cap and the Nonpurpose Investments allocable to the Note thereunder are determined With respect to new money issues, the first Valuation Date shall be the second year anniversary date of the date of issuance of the Note; thereafter, the first day of each Bond Year shall constitute a Valuation Date. With respect to a refunding issue, each date on which proceeds of the refunded issue would become transferred proceeds of the refunding issue, e.g each date on which principal of the refunded issue is paid with proceeds of the refunding bonds, shall constitute a Valuation Date. In addition, the first date of each Bond Year shall also be a Valuation Date. "Value" means, in the case of a Note, the Value of a Note and in the case of an Investment, the Value of an Investment. "Value of a Note" means, in the case of a Plain Par Bond or Note, its outstanding stated principal amount, plus accrued unpaid interest or in the case of a Plain Par Bond or Note actually redeemed, or treated as redeemed, its stated redemption price on the redemption date plus accrued unpaid interest. In the case of a bond other than a Plain Par Bond or Note, the value on a date of such a bond is its Present Value on that date, using the yield on the issue of which the bonds or Note is a part as the discount factor. In determining the Present Value of a variable rate bond, the initial interest rate on the bond or note established by the index or other rate setting mechanism is used to determine the interest payments on that bond or note. "Value of an Investment" means, on any date, as permitted or required, the Present Value or the Fair Market Value of the Investment or its outstanding principal amount. Paragraphs (a) through (f) below specify the valuation methods required or permitted to be used for the Investments listed: (a) Fixed Rate Investments. A Fixed Rate Investment may be valued at its Present Value or at its Fair Market Value on any date unless it is required to be invested at a restricted yield. 573419.1 031686 CERT (b) Plain Par Investments. A Plain Par Investment may be valued at its outstanding stated principal amount on any date (plus interest accrued but unpaid on that date) unless it is required to be invested at a restricted yield. (c) An,/Investment. Any Investment may be valued at its Fair Market Value on any date unless it is required to be invested at a restricted yield. (d) Yield Restricted Investments. An Investment required to be invested at a restricted yield (for example, an Investment held after the expiration of the applicable investment temporary period) must be valued at its Present Value as of any date unless the Investment is required to be valued at Fair Market Value as provided in paragraph (e) below. (e) Mandatory Valuation at Fair Market Value. Subject to paragraph (d) above, Investments deemed to be acquired or disposed of with respect to the Note (as a result, for example, of sinking fund deposits or withdrawals) must be valued on the deemed acquisition or disposition date at Fair Market Value unless (i) the Investment was allocated to the Note as Transferred Proceeds or as a result of the application of the Universal Cap rule in which case it may be valued at Present Value or (ii) the Investment is held in a commingled fund (other than a bona fide debt service fund or a commingled fund that operates exclusively as a reserve fund, sinking fund or replacement fund for two or more issues of the Issuer). (f) Special Rule for Transferred Proceeds Notwithstanding any matter stated above, the Value of any Nonpurpose Investment allocable to Transferred Proceeds of an issue of refunding obligations may not exceed the Value of that Investment used for purposes of applying the arbitrage restrictions to the refunded obligations on the date proceeds of the refunding obligations are used to redeem the refunded obligations "Working Capital Expenditure" means any cost ora type that does not constitute a Capital Expenditure. "Yield" means, as of any Computation Date, the Yield computed on an issue of obligations under Treasury Regulation Section 1~ 148-4 and on an Investment under Treasury Regulation Section 1~ 148-5 in either case by compounding interest at the end of each compounding interval as further described in paragraphs (a), (b) and (c) below: (a) When used with respect to a Fixed Yield Issue. Yield means that discount rate that, when used in computing the Present Value of (i) all unconditionally payable payments of principal and interest of or on the bonds included in such Fixed Yield Issue, (ii) all unconditionally payable fees for Qualified Guarantees on such bonds and (iii) all fees expected to be paid for Qualified Guarantees, produces an amount equal to the sum of the Present Value of the aggregate Issue Prices of the bonds comprising the issue (determined using the same discount rate used to determine the Present Value of payments for principal, interest and Qualified Guarantees). The Yield is computed as of the issue date of the Fixed Yield Issue by treating each bond included in the issue that is either subject to mandatory or contingent early redemption or to certain optional 573419.1 031686 CERT redemption provisions as being redeemed on its expected early redemption date for an amount equal to its Value on that date. Ifa Fixed Yield Bond (i) is subject to optional redemptions within 5 years of its issue date and the Yield not taking into account the optional redemption is more than 1/8 of 1% above its Yield assuming the early redemption, (ii) is issued at an issue price that exceeds the stated redemption price at maturity by more than 1/4 of 1% multiplied by the product of the stated redemption price to maturity and the number of complete years to the first optional redemption date for the bond, or (iii) bears interest at increasing interest rates, the Yield on the issue including such Fixed Yield Bond is computed by treating the Fixed Yield Bond as redeemed at its stated redemption price on the optional redemption date that produces the lowest Yield on the issue. No adjustment will be made on any Computation Date to the Yield on a Fixed Yield Issue as computed on its issue date unless redemption rights are subsequently transferred to a third party or termination payments are received with respect to Qualified Hedges. The Yield on a Fixed Yield Bond is calculated in the same manner as Yield on a Fixed Yield Issue. (b) When used with respect to a Variable Yield Issue, Yield is computed separately for each Computation Period and is that discount rate that, when used to compute the Present Value as of the first day of the Computation Period of all payments of principal and interest of or on the bonds included in the Variable Yield Issue and of all fees for Qualified Guarantees attributable in each case to the Computation Period, produces an amount equal to the Present Value (using the same discount rate and determined as of the first day of the Computation Period) of the aggregate Issue Price (or the "deemed issue price") of all the bonds included in the Variable Yield Issue 6) Deemed Issue Price. For purposes of paragraph (b) above, the deemed issue price of a bond outstanding at the end of a Computation Period or that has been converted to a Fixed Yield Bond during the Computation Period is the Value of the bond at the end of the Computation Period. (ii) Payments Allocable to a Computation Period. For purposes of paragraph (b) above, the payments on a bond that are attributable to a Computation Period include (1) amounts paid during the Computation Period (i) for principal on the bond, (ii) for interest accruing on the bond during the Computation Period or for interest accrued during the immediately Prior Computation Period that was included in the deemed issue price of the bond during the current Computation Period as unpaid accrued interest, (iii) for properly allocable fees for Qualified Guarantees or Qualified Hedges and (2) if a bond is actually redeemed during the Computation Period, an amount equal to the greater of its Value on the redemption date or the actual redemption price on that date. (c) When used with respect to any Investment allocated to an issue, Yield means the Yield on the Investment computed using the same compounding interval and financial conventions used to calculate the Yield on the issue of obligations to which it is allocated. The Yield on an Investment allocated to an issue is the discount rate that, when used on the date the Investment is first purchased with Gross Proceeds or allocated 573419 1 031686 CERT to Gross Proceeds of the issue to compute the Present Value on that date of all unconditionally payable Nonpurpose Receipts from the Investment, produces an amount equal to the Present Value on that date of all unconditionally payable Nonpurpose Payments for the Investment. ARTICLE III Arbitrage/Rebate Exemption 3.1. Authorization. The Note is authorized to be issued pursuant to applicable provisions of the laws of the State and the Resolution. 3.2. UseofProceeds. The lssuer is issuing the Note in anticipation ofreal property taxes to be received for the fiscal year ending December 31, 2010. Proceeds will be used to pay Restricted Working Capital Expenditures of the Issuer and must be allocated to such current expenses in accordance with the provisions of the Proceeds-Spent-Last-Rule 3.3. Temporary Period. The Note will finance an amount not exceeding the Issuer's anticipated Restricted Working Capital Expenditures which comprise its cumulative cash flow deficit (the "Deficit") for the period during which tax and other revenues are anticipated. Accordingly, the proceeds of the Note may be invested without restriction as to Yield for a period not longer than 13 months from the date hereof 3.4. Computation of Cumulative Cash Flow Deficit. (a) The Deficit has been computed in accordance with Exhibit A hereto by adding the total of estimated Solid Waste Management District expenditures to be made by the Issuer during the fiscal year ending December 31, 2010, through the date of the maximum deficit which would ordinarily be paid out of ad valorem taxes and other receipts and by subtracting therefrom the sum of the amounts that are expected to be Available Amounts for the payment of such expenditures during such period, including anticipated earnings derived from the investment of proceeds of the Note, but not including such proceeds. (b) The Issuer understands that the Note is being issued in an amount not in excess of the lesser of (i) the sum of its projected Fiscal Year 2010 deficit and an amount equal to 5% of the actual working capital expenditures for Fiscal Year 2009 or (ii) the amount of its projected Fiscal Year 2010 deficit divided by .9. 3.5. Rebate. It is expected that the Issuer will not be required to make rebate payments to the United States pursuant to Section 148(0 of the Code because the Issuer expects to expend the Net Proceeds of the Note (inclusive of interest earnings on the proceeds of the Note) for their governmental purpose no later than the day which is 6 months after the date of issuance of the Note. Net Proceeds of such issue shall be treated as expended for the governmental purpose of the Note on the first day after the date of issuance that the Deficit exceeds 90 percent of the aggregate face amount of the Note 573419.1 031686 CERT In the event the Issuer does not expend or is deemed not to have expended the Net Proceeds of the Note as provided above within 6 months from the Issue Date, the Issuer will comply with the terms of Article V hereof regarding payment of Rebate to the United States. ARTICLE IV Use of Proceeds 4.1. Proceeds. For purposes of this Article IV, the term proceeds means the net amount (after payment of all costs and expenses associated with issuing the Note) received by the Issuer from the sale of the Note excluding accrued interest. 4.2. Private Loans. No portion of the Proceeds of the Note will be used directly or indirectly to make loans to nongovernmental persons. 4.3. Private Use. The aggregate amount of proceeds of the Note used directly or indirectly in a trade or business carried on by a nongovernmental entity, or in any activity carried on by a person other than a governmental entity ("Private Use"), excluding use by a state or local government unit and use as a member of the general public, will not exceed 10% of such Proceeds in the event that more than 10% of the principal or 10% of the interest due on the Note during the term thereof is, under the terms of the Note or any underlying arrangement, directly or indirectly, secured by any interest in property used or to be used for a Private Use or in payments in respect of property used or to be used for a Private Use or is to be derived from payments, whether or not to the Issuer, in respect of property or borrowed money used or to be used for a Private Use. 4.4. Unrelated/Related Disproportionate Use No more than 5 percent of the Proceeds of the Note will be used directly or indirectly in the trade or business of a person other than a governmental unit that is unrelated or related and disproportionate to the governmental use of the property referred to in paragraph 4.3 above. For purposes of this Arbitrage and Use of Proceeds Certificate, Note Proceeds are allocable to an unrelated Private Use if such use is neither directly nor operationally related to the governmental use and Note proceeds are allocable to a disproportionate related Private Use to the extent that the proceeds of the Note which are to be used to finance property used by a nongovernmental person in a trade or business which is related to the governmental use of the property referred to in paragraph 4.3, above, exceeds the proceeds of the Note which are to be used for the governmental use to which such Private Use relates. 4.5. Other Private Uses Defined. For purposes of paragraphs 4.3 and 4.4, a Private Use includes use pursuant to any contract or other arrangement including, without limitation, leases, management contracts, guarantee contracts, take or pay contracts, or put or pay contracts with persons who are not state or local governments. Any management or operations contract or agreement which provides for (1) a term (including renewal options) not in excess of five years, (2) payments no portion of which are based on a share of net profits and at least 50 573419.1 031686 CERT percent of which are made on a periodic, fixed-fee basis, and (3) termination by either party, without penalty, at the end of any three-year period, does not give rise to a Private Use. 4.6. ResearcbdStudent Loans/Pension Funds/Mortgages No portion of the proceeds received by the Issuer will be used, directly or indirectly, to conduct or sponsor the conduct of research of any kind, to finance student loans or pension funds, or to provide mortgages on owner-occupied residences. ARTICLE V Terms of Note, Calculation of Yield and Rebate Compliance 5.1. Description of Note. The date, maturities, denominations, and rates of interest of the Note is shown on the Certificate of Determination executed by the Supervisor as of December 15, 2009. 5.2. Yield. Except as otherwise provided, when used in this Certificate, the term "yield" means the discount rate that produces the same present value as of the date of issuance when used in computing the present value of all issue payments to be paid in connection with the Note and the present value of all the issue prices of the Note. 5.3. Issue Payments. For purposes of Section 5.2, issue payments to be paid include interest, principal and Qualified Guarantee payments, if any, determined under the definition of Yield in Article II above. 5.4. Issue Price. For purposes of Section 5.2, the issue price of the Note is determined on the basis of the initial offering prices to the public (not including bond houses and brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which prices a substantial amount of each maturity of the Note was sold to the public, or, if privately placed, the price paid by the first buyer of such obligations. The Issuer has relied upon representations made to it by the purchasers of the Note in a letter of the purchasers. 5.5. Rebate Compliance. The Issuer understands that the continued non-inclusion of interest on the Note for purposes of federal income taxation depends, in part, upon compliance with the arbitrage limitations imposed by Section 148 of the Code, including the rebate requirement described in this Section 5.5. (a) Rebate Requirement. Section 148(f) of the Code requires the payment to the United States of the excess of the amount earned on the investment of Gross Proceeds in Nonpurpose Investments over the amount that would have been earned had the amount so invested been invested at a rate equal to the Yield on the Note, together with any income attributable to such excess. Except as provided below, all Gross Proceeds of the Note is subject to this requirement. (b) Record of Investments. In order to meet the rebate requirement of the Code the Issuer will record the date of receipt, amount and source of any Gross Proceeds, e.g., proceeds from the sale of the Note, loan repayments, investment earnings. For each Nonpurpose Investment acquired with or allocated to Gross Proceeds of the Issue, the 573419.1 031686 CERT Issuer will record the purchase date or allocation date of such investment, its purchase price (excluding any broker or dealer's commission or discount), or, if not acquired directly with Gross Proceeds, its Value on the date the Nonpurpose Investment is allocated to Gross Proceeds, accrued interest due on its purchase date or allocation date, its face amount, its coupon rate, its Yield, the frequency of its interest payment, its disposition price (excluding any broker or dealer's commission or discount), the accrued interest due on its disposition date and its disposition date. In addition, the Issuer will record the date and amount of all expenditures of Note proceeds, including expenditures for rebate, other than expenditures to acquire investments. (c) Computation of Rebate Amount. Subject to the special rules set forth in paragraphs (d) and (e) of this Section, the Issuer will determine the Rebate Amount on each Computation Date. The Rebate Amount as of any Computation Date is the excess of the Future Value of all receipts with respect to Nonpurpose Investments over the Future Value of all payments with respect to the purchase of Nonpurpose Investments or the allocation of such investments to the proceeds of the Note, determined as of each Computation Date. To the extent amounts received from investments are reinvested, these amounts may be netted against each other and not taken into account in the Computation of Rebate Amount. The Issuer shall determine the nonpurpose receipts and nonpurpose payments as described below. (i) Receipts. Receipts with respect to Nonpurpose Investments include (i) actual receipts, amounts actually or constructively received with respect to an investment, reduced by Qualified Administrative Expenses (ii) disposition receipts, the Fair Market Value of investments deemed to be sold on the date the investment ceases to be allocated to the issue, (except that Present Value may be substituted for Fair Market Value with respect to fixed yield investments, investments required to be yield restricted, and investments transferring by virtue of the universal cap or transferred proceeds rules) and (iii) Computation Date Receipts, the Market Value (Present Value, in the case of guaranteed investment contracts and fixed rate investments) of all Nonpurpose Investments allocated to the issue at the close of business on a Computation Date; and (iv) rebate receipts, any recovery of an overpayment of rebate. (ii) Payments. Payments with respect to Nonpurpose Investments include 1) direct payments, the amount of Gross Proceeds of the issue directly used to purchase the investment, including Qualified Administrative Expenses constructive payments, the Value of an investment allocated to (but not directly purchased with) Gross Proceeds on the date so allocated; Nonpurpose Investments allocated to an issue at the end of the preceding Computation Period, at the value of the investments at the beginning of the computation period; rebate payments, payments of rebate amounts when due and yield reduction payments on Nonpurpose Investments and the Computation Date Credit. 573419.1 031686 C]ERT (d) Exception for Net Proceeds Entirely Spent Within Six Months. Notwithstanding anything in this Section 5.5 to the contrary, if all of the Net Proceeds of the Note, including investment earnings received with respect to all Funds and Accounts comprising such Issue, have been expended for the governmental purpose of the issue in within six months after the date of issue, then the only Nonpurpose Investments to be taken into account in the calculation of the Rebate Amount are Nonpurpose Investments acquired with or allocated to Gross Proceeds held in the Reserve Fund, and to any Gross Proceeds arising after such six months which were not reasonably anticipated as of the date ofissuance. The existence of sinking fund or pledged fund proceeds or the expectation that such proceeds will arise within six months of the issue date will make the six-month expenditure exception to rebate inapplicable. For purposes of this exception, Net Proceeds used to pay principal of bonds are not treated as expended on the governmental purpose of the issue. (i) Tax/Revenue Anticipation Note. The Net Proceeds (including earnings thereon) of a tax and/or revenue anticipation issue shall be deemed to be expended for the governmental purpose of the issue on the first day after the date of issuance that the Cumulative Cash Flow Deficit to be financed by such issue exceeds 90 percent of the Net Proceeds. (ii) Cumulative Cash Flow Deficit. For the purposes of this Section 5.5(d) "Cumulative Cash Flow Deficit" means, as of the date of computation, the excess of the expenses paid, for the period beginning on the date of issue and ending on the date six months after the date of issue or on the date of computation of the Cumulative Cash Flow Deficit, which would ordinarily be paid out of or financed by anticipated tax or other revenues over the Available Amount (other than the proceeds of the issue, but including earnings thereon) during such period for the payment of such expenses. (e) $100,000 Debt Service Fund Gross Earnings Exception. Notwithstanding anything in this Section 5.5 to the contrary, if the gross earnings from the Investments held in a debt service fund for the Bond Year in question, are less than $100,000, then any amount earned on such debt service fund shall not be taken into account in determining the Rebate Amount. In this regard, the $100,000 earnings limitation is deemed satisfied if the average annual debt service on the issue does not exceed $2,500,000. For purposes of this paragraph, the term "gross earnings" means the aggregate amount earned on the Nonpurpose Investment in which the Gross Proceeds deposited to the debt service fund are invested, including amounts earned on such amounts if allocated to the debt service fund. 5.6. Payment to United States. (a) Unless the Note is redeemed prior to such time, the Issuer will pay to the United States, not later than 60 days after each Installment Computation Date, an amount which, when added to the Future Value as of such date of all previous rebate payments made with respect to the Note, is equal to not less than 90 percent of the Rebate Amount calculated as of that date. The Issuer will pay to the United States, not later than 60 days 573419 1 031686 CERT after the Note is fully paid or redeemed, 100 percent of the Rebate Amount on the Final Computation Date. (b) If the final rebate payment is not made within 60 days after the Final Computation Date, interest on the Rebate Amount will be deemed to accrue at the underpayment rate under Section 6621 of the Code, beginning on the date the Rebate Amount is due and ending on the date 10 days before it is paid. (c) The Issuer will mail each payment to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by the copy of the Form 8038-T and the Form 8038-G or 8038-GC filed with respect to the Note issue and a statement identifying the issuer and the issue, including the CUSIP number for the Note with the latest maturity for which there is a CUSIP number. 5.7. Recordkeeping In connection with rebate requirement the Issuer will maintain the following records: (a) The Issuer will retain records of the determinations made pursuant to Section 5.5 until six years after the retirement of the last obligation of the issue. (b) The Issuer will record all amounts paid to the United States pursuant to Section 5.6. 5.8. Fair Market Value. The Issuer will not acquire Nonpurpose Investments at other than an arm's length, Fair Market Value price. If the Issuer invests any Gross Proceeds in certificates of deposit or pursuant to an investment contract, it will deliver certifications establishing that the certificate or contract satisfies the safe harbor conditions for each, as applicable, set forth in Article II under the definition of"Fair Market Value". (SEAL) 1N WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of the Issuer as of the 15th day of Supervisor 573419 1 031686 CERn!' Exbibit A - Cash Flow Solid Waste Management District Estimated Estimated Receipts Expenses For Month of For Month of Balance as of Oct. 30, 2009 November 328,663 329,000 December 212,321 512,845 January, 2010 1,420,000 583,603 February 170,000 212,500 March 155,000 218,500 Cumulative ("net") Surplus/(Deficit) At End of Month $957 620 (299,904) 536,493 493,993 430,493 573419.1 031686 CERT ELIZABETH A. NEVILLE, RMC, CMC TOWN CLERK REGISTRAR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Town Hall, 53095 Main Road P.O. Box 1179 $outhold, New York 11971 Fax (631) 765-6145 Telephone (631) 765-1800 southoldtown.northfork.net OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD November 30, 2009 Tow of Southold, New York (Our File Designation: 2615/31686) Mr. Robert ?. Smith Hawkins, Delafield & Woods, LLP One Chase Manhattan Plaza New York, NY 10005 Dear Mr. Smith: Enclosed find a certified copy of the resolution of adoption and a certified coy of the Extract of Minutes. If there is anything else you need at this time for your records, please feel free to contact me. Very truly yours, Encs. Cc: Town Attorney Lynda M Rudder Deputy Town Clerk RESOLUTION 2009-900 ADOPTED Item # 5.13 DOC ID: 5419 THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO. 2009-900 WAS ADOPTED AT THE REGULAR MEETING OF THE SOUTHOLD TOWN BOARD ON NOVEMBER 17, 2009: TAX ANTICIPATION NOTE RESOLUTION OF THE TOWN OF SOUTHOLD, NEW YORK, ADOPTED NOVEMBER 17, 2009, AUTHORIZING THE ISSUANCE OF $300,000 TAX ANTICIPATION NOTES IN ANTICIPATION OF THE RECEIPT OF TAXES OR ASSESSMENTS LEVIED OR TO BE LEVIED ON BEHALF OF THE TOWN OF SOUTHOLD SOLID WASTE MANAGEMENT DISTRICT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2010 RESOLVED BY THE TOWN BOARD OF THE TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK, AS FOLLOWS: Section 1. Tax Anticipation Notes (herein called the "Notes") of the Town of Southold, in the County of Suffolk, New York (herein called the "Town"), in the principal amount of $300,000, and any notes in renewal thereof, are hereby authorized to be issued pursuant to the provisions of Sections 24.00 and 39.00 of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York (herein called the "Law"). Section 2. The following additional matters are hereby determined and declared: (a) The Notes shall be issued in anticipation of the collection of real estate taxes or assessments levied on behalf of the Town of Southold Solid Waste Management District for the fiscal year ending December 31, 2010, and the proceeds of the Notes shall be used only for the purposes for which said taxes or assessments are levied. (b) The Notes shall mature within the period of one year from the date of their issuance. (c) The Notes are not issued in renewal of other notes. No other notes have been heretofore authorized in anticipation of said taxes or assessments. (d) The total aggregate tax levy and assessments for the Town of Southold Solid Waste Management District for the fiscal year ending December 31, 2010 is expected to be at least $2,000,000.00, all of such amounts remains uncollected at the date of adoption of this resolution. Section 3. The Notes hereby authorized shall contain the recital of validity prescribed by Section 52.00 of the Law and shall be general obligations of the Town, and the faith and credit of the Town are hereby pledged to the punctual payment of the principal of and interest on the Notes and unless the Notes are otherwise paid or payment provided for, an amount sufficient for such payment shall be inserted in the budget of the Town and a tax sufficient to provide for the payment thereof shall be levied and collected. Section 4. Subject to the provisions of this resolution and the Law, and pursuant to Sections 50.00, 56.00, 60.00 and 61.00 of the Law, the power to sell and issue the Notes authorized pursuant hereto, or any renewals thereof, and to determine the terms, form and contents, including the manner of execution, of such Notes, and to execute arbitrage certifications relative thereto, is hereby delegated to the Supervisor, the chief fiscal officer of the Town. Section 5. The Notes shall be executed in the name of the Town by the manual signature of the Supervisor, the Town Clerk, or such other officer of the Town as shall be designated by the chief fiscal officer of the Town, and shall have the corporate seal of the Town impressed or imprinted thereon which corporate seal may be attested by the manual signature of the Town Clerk. Section 6. This resolution shall take effect immediately. Elizabeth A, Neville Southold Town Clerk RESULT: ADOPTED [UNANIMOUS] HOVER: Thomas H. Wickham, Councilman SECONDER: William Ruland, Councilman AYES: Ruland, Orlando, Krupski Jr., Wickham, Evans, Russell EXTRACT OF MINUTES Meeting of the Town Board of the Town of Southold, in the County of Suffolk, New York November 17, 2009 A regular meeting of the Town Board of the Town of Southold, in the County of Suffolk, New York, was held at the Town Hall, 53095 Main Road, Southold, New York, at 4:30 o'clock P.M., on November 17, 2009. There were present: Hon. Scott A. Russell, Supervisor; and Board Members: Councilman Thomas H. Wickham Councilman William Ruland Councilman Vincent Orlando Councilman Albert Krupski, Jr. Justice Louisa Evans There were absent: None Also present: Elizabeth A. Neville, Town Clerk Martin D. Finnegan, Town Attorney Councilman Thomas H. Wickham offered the following resolution and moved its adoption: TAX ANTICIPATION NOTE RESOLUTION OF THE TOWN OF SOUTHOLD, NEW YORK, ADOPTED NOVEMBER 17, 2009, AUTHORIZING THE ISSUANCE OF $300,000 TAX ANTICIPATION NOTES 1N ANTICIPATION OF THE RECEIPT OF TAXES OR ASSESSMENTS LEVIED OR TO BE LEVIED ON BEHALF OF THE TOWN OF SOUTHOLD SOLID WASTE MANAGEMENT DISTRICT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2010 RESOLVED BY THE TOWN BOARD OF THE TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK, AS FOLLOWS: Section 1. Tax Anticipation Notes (herein called the "Notes") of the Town of Southold, in the County of Suffolk, New York (herein called the "Town"), in the principal amount of $300,000, and any notes in renewal thereof, are hereby authorized to be issued pursuant to the provisions of Sections 24.00 and 39.00 of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York (herein called the "Law"). Section 2. The following additional matters are hereby determined and declared: (a) The Notes shall be issued in anticipation of the collection of real estate taxes or assessments levied on behalf of the Town of Southold Solid Waste Management District for the fiscal year ending December 31, 2010, and the proceeds of the Notes shall be used only for the purposes for which said taxes or assessments are levied. (b) The Notes shall mature within the period of one year from the date of their issuance. (c) The Notes are not issued in renewal of other notes. No other notes have been heretofore authorized in anticipation of said taxes or assessments. (d) The total aggregate tax levy and assessments for the Town of Southold Solid Waste Management District for the fiscal year ending December 31, 2010 is expected to be at least $2,000,000.00, all of such amounts remains uncollected at the date of adoption of this resolution. Section 3. The Notes hereby authorized shall contain the recital of validity prescribed by Section 52.00 of the Law and shall be general obligations of the Town, and the faith and credit of the Town are hereby pledged to the punctual payment of the principal of and interest on the Notes and unless the Notes are otherwise paid or payment provided for, an amount sufficient for such payment shall be inserted in the budget of the Town and a tax sufficient to provide for the payment thereof shall be levied and collected. Section 4. Subject to the provisions of this resolution and the Law, and pursuant to Sections 50.00, 56.00, 60.00 and 61.00 of the Law, the power to sell and issue the Notes authorized pursuant hereto, or any renewals thereof, and to determine the terms, form and contents, including the manner of execution, of such Notes, and to execute arbitrage certifications relative thereto, is hereby delegated to the Supervisor, the chief fiscal officer of the Town. Section 5. The Notes shall be executed in the name of the Town by the manual signature of the Supervisor, the Town Clerk, or such other officer of the Town as shall be designated by the chief fiscal officer of the Town, and shall have the corporate seal of the Town impressed or imprinted thereon which corporate seal may be attested by the manual signature of the Town Clerk. Section 6. This resolution shall take effect immediately. The adoption of the foregoing resolution was seconded by Councilman William Ruland and duly put to a vote on roll call, which resulted as follows: AYES: Hon. Scott A. Russell, Supervisor; and Councilman Thomas H. Wickham Councilman William Ruland Councilman Vincent Orlando Councilman Albert Krupski, Jr. Justice Louisa Evans NOES: None The resolution was declared adopted. TOWN CLERK'S CERTIFICATE I, Elizabeth A. Neville, being the duly appointed and acting Town Clerk of Town of Southold, in the County of Suffolk, State of New York, HEREBY CERTIFY that the foregoing annexed extract from the minutes of a meeting of the Town Board of said Town duly called and held on November 17, 2009, has been compared by me with the original minutes as officially recorded in my office in the Minute Book of said Town Board and is a true, complete and correct copy thereof and of the whole of said original minutes so far as the same relates to the subject matters referred to in said extract. IN WITNESS WHEREOF, (SEAL) I have hereunto set my hand and affixed the corporate seal of said Town of Southold this 17th day of November, 2009. ~'own Clerk 572119.1 031686 RES DELAFIELD &WOOD LLP (212) 820-9662 November 4, 2009 NEW WASHINGTON NEWAR~ HARTFORD LOS ANOELES SAC~AME NTO SAN FRANCISCO Tow of Southold, New York (Our File Designation: 2615/31686) Mr. John Cushman Town Comptroller Town of Southold P.O. Box 1179 Southold, New York 11971 Dear John: Pursuant to your request, I have prepared and now forward to you a draft Extract of Minutes of the meeting of the Town Board to be held tomorrow, which shows adoption of the resolution authorizing the issuance of Tax Anticipation Notes for the 2010 fiscal year. The resolution must be adopted by a majority of the full voting strength of the entire Town Board. Following the meeting, please obtain and forward to me a certified copy of the completed Extract of Minutes for inclusion in our record of proceedings as soon as possible. With best regards, I am Very truly yours, RPS/def Enclosures Robert P. Smith 572119.1 031686 RES EXTRACT OF MINUTES Meeting of the Town Board of the Town of Southold, in the County of Suffolk, New York November 17, 2009 A regular meeting of the Town Board of the Town of Southold, in the County of Suffolk, New York, was held at the Town Hall, 53095 Main Road, Southold, New York, at __ o'clock P.M., on November 17, 2009. There were present: Hon. Scott A. Russell, Supervisor; and Board Members: There were absent: Also present: Elizabeth A. Neville, Town Clerk Martin D. Finnegan, Town Attorney John A. Cushman, Town Comptroller adoption: offered the following resolution and moved its 572119A 031686 RES TAX ANTICIPATION NOTE RESOLUTION OF THE TOWN OF SOUTHOLD, NEW YORK, ADOPTED NOVEMBER 17, 2009, AUTHORIZING THE ISSUANCE OF $300,000 TAX ANTICIPATION NOTES IN ANTICIPATION OF THE RECEIPT OF TAXES OR ASSESSMENTS LEVIED OR TO BE LEVIED ON BEHALF OF THE TOWN OF SOUTHOLD SOLID WASTE MANAGEMENT DISTRICT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2010 RESOLVED BY THE TOWN BOARD OF THE TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK, AS FOLLOWS: Section 1. Tax Anticipation Notes (herein called the "Notes") of the Town of Southold, in the County of Suffolk, New York (herein called the "Town"), in the principal amount of $300,000, and any notes in renewal thereof, are hereby authorized to be issued pursuant to the provisions of Sections 24.00 and 39.00 of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York (herein called the "Law"). Section 2. The following additional matters are hereby determined and declared: (a) The Notes shall be issued in anticipation of the collection of real estate taxes or assessments levied on behalf of the Town of Southold Solid Waste Management District for the fiscal year ending December 31,2010, and the proceeds of the Notes shall be used only for the purposes for which said taxes or assessments are levied. (b) The Notes shall mature within the period of one year from the date of their issuance. 572119.1 031686 RES (c) The Notes are not issued in renewal of other notes. No other notes have been heretofore authorized in anticipation of said taxes or assessments. (d) The total aggregate tax levy and assessments for the Town of Southold Solid Waste Management District for the fiscal year ending December 31, 2010 is expected to be at least $2,000,000.00, all of such amounts remains uncollected at the date of adoption of this resolution. Section 3. The Notes hereby authorized shall contain the recital of validity prescribed by Section 52.00 of the Law and shall be general obligations of the Town, and the faith and credit of the Town are hereby pledged to the punctual payment of the principal of and interest on the Notes and unless the Notes are otherwise paid or payment provided for, an amount sufficient for such payment shall be inserted in the budget of the Town and a tax sufficient to provide for the payment thereof shall be levied and collected. Section 4. Subject to the provisions of this resolution and the Law, and pursuant to Sections 50.00, 56.00, 60.00 and 61.00 of the Law, the power to sell and issue the Notes authorized pursuant hereto, or any renewals thereof, and to determine the terms, form and contents, including the manner of execution, of such Notes, and to execute arbitrage certifications relative thereto, is hereby delegated to the Supervisor, the chief fiscal officer of the Town. Section 5. The Notes shall be executed in the name of the Town by the manual signature of the Supervisor, the Town Clerk, or such other officer of the Town as shall be designated by the chief fiscal officer of the Town, and shall have the corporate seal of the Town impressed or imprinted thereon which corporate seal may be attested by the manual signature of the Town Clerk. 572119.1 031686RES Section 6. This resolution shall take effect immediately. 572119.1 031686 RES The by adoption of the foregoing resolution was seconded and duly put to a vote on roll call, which resulted as follows: AYES: NOES: The resolution was declared adopted. 572119.1 031686 RES TOWN CLERK'S CERTIFICATE I, Elizabeth A. Neville, being the duly appointed and acting Town Clerk of Town of Southold, in the County of Suffolk, State of New York, HEREBY CERTIFY that the foregoing annexed extract from the minutes of a meeting of the Town Board of said Town duly called and held on November 17, 2009, has been compared by me with the original minutes as officially recorded in my office in the Minute Book of said Town Board and is a true, complete and correct copy thereof and of the whole of said original minutes so far as the same relates to the subject matters referred to in said extract. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of said Town of Southold this 17th day of November, 2009. (SEAL) Town Clerk 572119.1 031686 RES