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Resolution 2002-24 TAX EXEMPTION CERTIFICATE AND AGREEMENT or Y0 Vd(f_(the "Recipient") is executing this Tax Exemption Certificate and Agreement ("Tax greement") to allow the Illinois Environmental Protection Agency (the "Agency") to fund one or more loans (L 17 4: , L 17 9: , L17#: _ ) to the Recipient with proceeds of tax-exempt bonds. In addition, this Tax Agreement covers previous loans fully disbursed for projects evidenced by L17#:0130 , L17#: . 1 V53, and L17#: The Recipient and the Agency have previously executed or will execute a loan agreement (or loan agreements) (the "Loan Agreement(s)") providing that the Agency will advance funds to the Recipient for certain purposes. The Recipient is aware that the Agency has limited resources and might be unable to fund its loan to the Recipient without this Tax Agreement. Section 1. Definitions and Appendices. Attached hereto are three Appendices, made a part hereof. Appendix A contains certain covenants and representations that may or may not impose burdens on the Recipient. The Recipient is responsible for determining which covenants and representations, if any, in Appendix A relate to the Recipient. Appendix B contains a glossary of definitions applicable to the tax covenants, including Appendix A. Appendix C, if any, includes a description of certain funds or accounts that, as described in Appendix A, may be subject to investment restrictions or rebate payments. Section 2. Expectations. These certifications set forth various facts regarding the Loan and establish the expectations of the Recipient as to future events regarding the Loan and the use of Loan proceeds. These certifications also establish facts and expectations related to any IEPA Loans, and any moneys of the Recipient or related entities held in funds or accounts related to the IEPA Loans. The Recipient recognizes that the Loan proceeds are derived in whole or in part from obligations that are intended to be tax exempt. Certain certifications and covenants are presented here in summary form. Attached hereto as Appendix A are further details explaining how to comply with these covenants. Section 3. Purpose of the Loan. The proceeds of this Loan will be used to finance the Project, including architectural or engineering costs incurred prior to construction. The Recipient expects to borrow under the Loan and spend on the Project at least 90% of the commitment amount of the Loan. Section 4. The Project—Binding Commitment and Timing. The Recipient expects that the work of constructing the Project and the expenditure of Loan proceeds will continue to proceed with due diligence. The Recipient expects to draw and spend all of the amount that it will draw under the Loan no later than June 1, 2004 or, if later, three years after the execution of the Loan Agreement. CHApMAN AND CuTLER,APRn..2001 (VERNM.01) I Section 5. Reimbursement. None of the proceeds of this Loan will be used to reimburse expenditures made by the Recipient prior to the earlier of December 17, 2001 or, 60 days before the date of execution of the Loan Agreement except for engineering, design, and architectural expenditures incurred prior to the construction of the Project. Section 6. Hedges. Neither the Recipient nor any member of the same Controlled Group as the Recipient has entered into or expects to enter into any hedge (e.g., an interest rate swap, interest rate cap, futures contract, forward contract or an option) with respect to the IEPA Loans. Section 7. Internal Revenue Service Audits. The Internal Revenue Service has not contacted the Recipient regarding any obligations issued by or on behalf of the Recipient in connection with its wastewater or drinking water system and no such obligations are currently under examination by the Internal Revenue Service. Section 8. Funds and Accounts. The Recipient acknowledges that it is required to establish and maintain a Repayment Fund. To the extent that the Repayment Fund has been established for the proper matching of revenues and debt service within each year, and the Repayment Fund is depleted at least once each year to a balance that is no greater than 1/12 the annual debt service on the Recipient's IEPA Loans and any other debt instruments paid from the Repayment Fund, then the Repayment Fund constitutes a "bona fide debt service fund" within the meaning of the United States tax regulations. As such, the Repayment Fund will not be subject to investment restrictions or rebate relating to bonds funding any of the IEPA Loans. The Recipient's operations and maintenance accounts, depreciation accounts, renewal accounts or surplus accounts, except to the extent that such accounts are expected to be used to pay principal of or interest on the IEPA Loans, generally are not subject to investment restrictions and requirements hereunder. If the Recipient maintains a debt service reserve fund (or similar account) securing any of the IEPA Loans, such debt service reserve fund may be subject to certain investment restrictions and rebate requirements described in Appendix A. If the Recipient maintains any other funds or accounts (or any other formal or informal collection of money or investments) constituting Restricted Funds, those other funds or accounts may be subject to investment restrictions and rebate as described in Appendix A. Such restrictions may also apply if the Recipient has entered into (at any time) any covenants to maintain balances in any funds or accounts for the benefit of holders of its debt or guarantors thereof. The Recipient acknowledges that the Agency has prepared different versions of Appendix A the applicability of which is dependent on the size and complexity of the Recipient's finances. The Recipient has indicated the version incorporated herein. - 2 - ®CHAPMAN AND CUTLER,APRII.,2001 (VERNM.01) Section 9. Compliance with Rebate. The Recipient covenants to take such �... actions and make, or cause to be made. all calculations, transfers and payments that may be necessary to comply with the provisions of federal tax law applicable to the funds and accounts held by the Recipient associated with its IEPA Loans. Appendix A provides further details regarding this covenant. The Recipient will pay to the Trustee any amounts determined to be the amount of a rebate payment with respect to such amounts, and provide documentation as described in Appendix A. Section 10. Records. The Recipient agrees to keep and retain or cause to be kept and retained adequate records with respect to the investment of all amounts in all Restricted Funds and provide such records to the Agency on reasonable request. Section 11. Investment Restrictions. Any money in a Restricted Fund must be invested in investments purchased at the market price therefor at all times to the greatest extent practicable, and no amounts may be held as cash or be invested in zero yield investments other than obligations of the United State of America purchased directly from the United State of America. In the event moneys cannot be invested, other than as provided in this sentence due to the denomination, price or availability of investments, the amounts shall be invested in an interest bearing deposit of a bank with a yield not less than that paid to the general public or held uninvested to the minimum extent necessary. Except as provided in Appendix A, all moneys in any Restricted Fund shall be invested at a Yield not in excess of a Yield to be provided by the Agency. Appendix A contains further details related to investment restrictions. Section 12. Use Test. (a) No more than five percent of the Loan proceeds and the facilities financed thereby will be used by any entity, other than a state or local government unit, including as a result of (i) ownership, (ii) actual or beneficial use pursuant to a lease or a management, service, incentive payment, research or output contract or (iii) any other similar arrangement, agreement or understanding, whether written or oral, except for use of the Project on the same basis as the general public. Such prohibited use includes any formal or informal arrangement with any entity, other than a state or local governmental unit, that conveys special legal entitlements to any portion of the Project that is available for use by the general public or that conveys to any entity, other than a state or local governmental unit, any special economic benefit with respect to any portion of the Project that is not available for use by the general public. Such prohibited use might arise pursuant to a management contract, an output contract, or a contract to accept effluent from an entity. (b) None of the Loan proceeds will be used, directly or indirectly, to make or finance loans to any entity. Section 13. No Sale of the Project. Except as provided in Appendix A, none of the facilities financed with the Loan is expected to be sold or otherwise disposed of prior to the earlier of(i) the last date of the economic life of the property (determined on the date of issuance of the Loan) or(ii) the last maturity date of the Loan. - 3 - 0 CHAPMAN AND CUTLER,APRIL,2001 (VERNM.01) Section 14. Purchase of Bonds by Recipient. The Recipient will not purchase any bonds issued to finance the funding of any portion of the Clean Water and Safe Drinking Water Programs of the State of Illinois. Section 15. Future Events. The Recipient covenants that it will not take any action, omit to take any action or permit the taking or omission of any action within its control (including, without limitation, making or permitting any use of proceeds of IEPA Loans or of the facilities financed therewith or the use investment or application of any Restricted Fund) if taking, permitting or omitting to take such action would cause any bonds referenced in Section 14 to be an arbitrage bond or a private_activity bond within the meaning of the Internal Revenue Code of 1986 or would otherwise cause the interest on such bonds to be included in the gross income of the recipients thereof for federal income tax purposes. The Recipient agrees that it will cooperate with the Agency and the State of Illinois in responding to any inquiries from the Internal Revenue Service in connection with an examination of any of such bonds. If the Recipient has any questions regarding its responsibilities under these covenants, it will contact the Agency and request clarification or additional guidance. ���t Name of Authorized Representative GM orArY Gn�'�mp.l� ut orized Represe ative Signature Date Signed: - 4 - ©CHAPMAN AND CUTLER.APM 2001 (VERNM.01) APPENDIX A Appendix A, Section 1. Funds and Accounts. Listed in Appendix Care all of the Restricted Funds. Also included is a brief but accurate description of each. The list excludes renewal and depreciation funds, operating funds and surplus funds that are not expected to be used to pay principal of or interest on any of the IEPA Loans, and are not restricted or ear marked to assure availability to pay such principal or interest in the event that other moneys should prove insufficient. The list includes any debt service reserve funds, debt service payment funds, and any-other sinking fund or pledged fund for the Recipient's IEPA Loans (other than any Repayment Fund acting as a bona fide debt service fund). Where a portion of a fund or account maintained by the Recipient is so related to an IEPA Loan, that situation is noted. The Recipient understands that in such cases, it must account for the allocable portion of the fund or account. The Recipient acknowledges that any such fund or account or portion of such fund or ' account (whether or not noted in Appendix C) is subject to rebate and investment restrictions except for any portions meeting exceptions described herein. Appendix A, Section 2. Purpose of Repayment Fund. Principal of and interest on the Recipient's IEPA Loans will be paid solely from the Repayment Fund described in Section 8 of the Recipient's Tax Covenants. The Repayment Fund will be used primarily to achieve a proper matching of revenues and earnings with principal and interest payments on the Loan and all Existing Loans each year. It is expected that the Repayment Fund will be depleted at least once a year, except for a reasonable carry over amount not to exceed the greater of(a) the earnings on the investment of moneys in the Repayment Fund for the immediately preceding bond year or(b) 1/12th of the principal and interest payments on the Loan and Existing Loans for the immediately preceding bond year. Appendix A, Section 3. Other Replacement Proceeds Funds. The Recipient recognizes that investments in any sinking fund, pledged fund, reserve fund, or similar fund that is maintained as security for any IEPA Loan, is maintained as a source of payment for any of the Recipient's IEPA Loans, is expected to be used, directly or indirectly, to pay principal of or interest on any of the Recipient's IEPA Loans, or is accounted for as related to any of the Recipient's IEPA Loans may affect the tax status of bonds issued to finance the Loan. The Recipient has identified in Appendix C a list of all such funds and accounts that it currently maintains or expects to maintain. Upon reasonable request by the Agency, the Recipient agrees to provide the Agency with an accounting of such funds or accounts (including any such fund or account not noted in Appendix C). Such accounting (for each such account) will include a description of all investments and uninvested cash contained in such account at both the beginning and end of each year, a list of receipts and disbursements to or from such account (including the date and amount of each such receipt and disbursement), and a list of all purchase, interest or principal payment and liquidation transactions in such account (including the date, price and investment description). The Agency may utilize such information to confirm any amounts that may have to be paid to the United State of America with respect to such funds or accounts. The Recipient agrees to pay to the Trustee any such amount, if any- A-1 If the Agency determines that the investment of any such fund or account must be modified, the Agency may instruct the Recipient to restrict the investment or application of any such fund or account. The Recipient agrees to follow such instructions in addition to the instructions given herein. However, it is the responsibility of the Recipient to follow the covenants provided herein in a timely manner. The Recipient will contact the Agency to request further instructions or clarification if it is unsure as to actions it must take or the restrictions it must apply. The Recipient does not maintain a compensating balance, liquidity account, negative pledge of property held for investment purposes required to be maintained at least at a particular level; or similar arrangement with respect to, in any way, any IEPA Loan. Appendix A, Section 4. Market Price Investment Restrictions. The Recipient will not invest any of the amounts described in any Restricted Fund in any investment that has specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, or. any agreement to supply investments on two or more future dates (including any guaranteed' investment contract, forward supply contract. repurchase agreement, or any similar agreement) unless it awards such investment contract pursuant to competitive bidding in a manner approved by the Agency and its counsel. The Recipient may invest such amounts in certificates of deposit of banks or savings and loan associations that have a fixed interest rate, fixed payment schedules and substantial penalties for early withdrawal only if the yield on the certificate of deposit (A) is not less than the yield on reasonably comparable direct obligations of the United States of America and (B) is not less than the highest yield that is published or posted by the provider to be currently available from the provider on reasonably comparable certificates of deposit offered to the public. An investment of the amounts described in any Restricted Fund in any Commingled Fund shall only be made if the investments made for such Commingled Fund satisfy the provisions of this section. An investment in a Commingled Fund in which the Recipient and all members of the same Controlled Group as the Recipient own, in the aggregate, not more than ten percent of the beneficial interests shall be made only to the extent that such investment is made without an intent to reduce the amount to be rebated to the United States Government or to create a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the rebate or yield restriction requirements not been relevant to the Recipient. Appendix A, Section 5. Yield Restriction. The Restricted Funds must be invested at a yield not higher than certain limits to be provided by the Agency. These limits may change from time to time to limits that will be provided by the Agency to the Recipient. Not withstanding such requirement, the following may be invested without yield restriction: (a) amounts on deposit in the Repayment Fund that have not been on deposit for more than 13 months, so long as the Repayment Fund continues to qualify as a bona fide debt service fund as described in Appendix A, Section 2 above; (b) amounts invested in Non-AMT Tax-Exempt Investments; A-2 0 CHAPMAN AND CUTLER,APRII.,2001 (VERNM.O1) (c) The amount on deposit in any debt service reserve fund that is allocable to the Loan and any Existing Loans to the extent it does not exceed the least of the amounts computed pursuant to (i), (ii) or (iii) below: (i) 100% of the maximum annual debt service on the Loan and all Existing Loans; (ii) 125% of the average annual debt service on the Loan and all Existing Loans; or (iii) 10% of the stated principal amount of the Loan and all Existing Loans. Appendix A, Section 6. Continuing Nature of Yield Limits. Once moneys are subject to the yield limits of Appendix A, Section 5 above, such moneys remain yield restricted until they cease to be moneys constituting Loan proceeds or moneys to repay the Loan. Appendix A, Section 7. Federal Guarantees. Except for investments meeting the requirements of Appendix A, Section 5(a) or (c) hereof, investments of moneys in Restricted Accounts shall not be made in (a) investments constituting obligations of or guaranteed, directly or indirectly, by the United States of America (except obligations of the United States Treasury or investments in obligations issued pursuant to Section 21 B(d)(3) of the Federal Home Loan Bank Act, as amended (e.g., Refcorp Strips)), or (b) federally insured deposits or accounts (as defined in Section 149(b)(4)(B) of the Code). Except as otherwise permitted in this Section, no portion of the payment of principal or interest on the Loan or any Existing Loan is or will be guaranteed, directly or indirectly (in whole or in part), by the United States of America (or any agency or instrumentality thereof), including a lease, incentive payment, research or output contract or any similar arrangement, agreement or understanding with the United States of America or any agency or instrumentality thereof. No portion of the moneys constituting Loan proceeds or moneys to repay the Loan has been or will be used to make loans the payment of principal or interest with respect to which is or will be guaranteed (in whole or in part) by the United States of America (or any agency or instrumentality thereof). A federal guarantee does not include any guarantee by the Federal Housing Administration, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, the Student Loan Marketing Association or the Bonneville Power Administration pursuant to the Northwest Power Act (16 U.S.C. 839d) as in effect on the date of enactment of the Tax Reform Act of 1984. Appendix A, Section 8. Rebate. Amounts in the Restricted Funds except as noted herein are subject to the Rebate requirement. The Recipient is responsible for calculating the amount of rebate if any due on such funds or accounts including those listed in Appendix C. Such rebate calculations shall be based on bond yields equal to yields provided from time to time by the Agency. Such rebate computations shall be based upon a bond year ending March 15 of each year, and installment computation dates of March 15, 2007, and such other dates as may be provided by the Agency from time to time. Such computations shall ignore "rebate credits" and shall not reflect any hold back amount permitted under the regulations. For example, the rebate A-3 ©CRAPMAN AND CuTLER,ApRiL,2001 (VERNM.01) amount shall be 100% on each computation date, not reduced to 90% as might be permitted under regulations. The Recipient shall pay the amount of rebate due with respect to each such account no later than 50 days after each installment computation date. The Recipient may be a Qualified Small Issuer. If it is a Qualified Small Issuer, then it will not be required to compute or pay rebate, but the Recipient will maintain records to establish that it is a Qualified Small Issuer, and make such records available to the Agency on request. Appendix A, Section 9. Records. The Recipient shall retain records relating to each computation performed and all other investment records of amounts identified in Appendix A, Sections 1 and 2. Such records shall include: (a) purchase price; (b) purchase date; (c)type of investment; (d) accrued interest paid; (e) interest rate; (f) principal amount; (g) maturity date; (h) interest payment date; (i) date of liquidation; and 0) receipt upon liquidation. If any investment becomes allocable to one of the funds or accounts described in Section 8 of the Tax Covenants on a date other than the date such investment is purchased, the records required to be kept shall include the fair market value of such investment on the date it becomes so allocated. If any investment is retained after the date the last Loan or Existing Loan is retired, the records required to be kept shall include the fair market value of such investment on the date the last Loan or Existing Loan is retired. Amounts or investments will be segregated whenever necessary to maintain these records. Upon request of the Agency, such records will be provided to the Agency. Appendix A, Section 10. Sale of the Project. The Recipient shall not sell or otherwise dispose of portion of the Project without prior written approval of the Agency or as specifically Y allowed as described below: (a) Other than as provided in the next sentence, neither the Project nor any portion thereof has been, is expected to be, or will be sold or otherwise disposed of, in whole or in part, prior to the earlier of (i) the last date of the reasonably expected economic life to the Recipient of the property (determined on the first date of funding of the Loan) or (ii)the last maturity date of the Loan. The Recipient may dispose of personal property in the ordinary course of an established government program prior to the earlier of(i) the last date of the reasonably expected economic life to the Recipient of the property (determined on the first date of funding of the Loan) or (ii) the last maturity of the Loan, provided: (A) the weighted average maturity of the Loan financing the personal property is not greater than 120 percent of the reasonably expected use of that property for governmental purposes; (B) the Recipient reasonably expects on the first date of funding of the Loan that the fair market value of that property on the date of disposition will be not greater than 25 percent of its cost; (C) the property is no longer suitable for its governmental purposes on the date of disposition; and (D) the Recipient deposits amounts received from the disposition in a commingled fund with substantial tax or other governmental revenues and the Recipient reasonably expects to spend the amounts on governmental programs within six months from the date of the commingling. A-4 0 CH"MAN AND CUTLER,APRII.,2001 (VERNM.01) (b) The Recipient acknowledges that if Loan-financed property is sold or otherwise disposed of in a manner contrary to (a) above, such sale or disposition may constitute a "deliberate action" within the meaning of the Regulations that may require remedial actions to prevent bonds financing the Loan from becoming private activity bonds. The Recipient shall promptly contact the Agency if a sale or other disposition of Loan-financed property is considered by the Recipient. Appendix A, Section 11. Maintenance of Tax Exemption. The Recipient recognizes that investors in tax-exempt bonds are relying on these covenants, and will contact the Agency if the Recipient determines that it may have violated any covenant or if it is unsure of any action required of it. The Agency may under such circumstances provide the Recipient with additional instructions. These tax covenants may be supplemented or amended by the Recipient and the Agency, and covenants contained herein need not be observed if such supplementation, amendment, or non-observance will not adversely affect the tax status of any bonds of the State of Illinois or its agencies or authorities financing the clean water and safe drinking water programs of the State of Illinois intended to be tax exempt, and the Recipient obtains an opinion of Bond Counsel addressed to the Agency and the State of Illinois to that effect. A-5 0 CHAPMAN AND CUTLER,APRIL,2001 (VERNM.01) APPENDIX B GLOSSARY "Agency" means the Illinois Environmental Protection Agency. "Bona Fide Debt Service Fund" means any fund or account (i) established and maintained primarily for the proper matching of revenues and debt service within a bond year and which is depleted at least once every year to an amount not in excess of a reasonably carryover amount not to exceed the greater of earnings on investments in such fund or account during the preceding bond year, or (ii) 1/12th of the principal and interest payments made from such fund for the preceding year. "Bond Counsel" means Chapman and Cutler or any other nationally recognized firm of attorneys experienced in the field of municipal bonds whose opinions are generally accepted by purchasers of municipal bonds. "Commingled Fund" means any fund or account containing both Gross Proceeds and an amount in excess of $25,000 that are not Gross Proceeds if the amounts in the fund or account are invested and accounted for, collectively, without regard to the source of funds deposited in the fund or account. An open-ended regulated investment company under Section 851 of the Code is not a Commingled Fund. "Control" means the possession, directly or indirectly through others, of either of the following discretionary and non-ministerial rights or powers over another entity: I (a) to approve and to remove without cause a controlling portion of the governing body of a Controlled Entity; or (b) to require the use of funds or assets of a Controlled Entity for any purpose. "Controlled Group" means a group of entities directly or indirectly subject to Control by the same entity or group of entities, including the entity that has Control of the other entities. "Existing Loan" means the eligible capital improvements to the Recipient's water or financed with the Loan as described in the Loan Agreement. "External Commingled Fund" means a Commingled Fund in which the Issuer and all members of the same Controlled Group as the Issuer own, in the aggregate, not more than ten percent of the beneficial interests. "IEPA Loans" means any and all loans from the Agency or its assigns to the Recipient for clean water or safe drinking water purposes. B-1 "Loan or Loans" means the IEPA Loan(s) evidenced by the Loan Agreement(s) executed by the Agency and the Recipient for those projects identified on Page 1 of this document by their L 17#(s). "Non-AMT Tax-Exempt Investments" (i) any obligation described in Section 103(a) of the Internal Revenue Code of 1986 (the "Code"), the interest on which is excludable from gross income of any owner thereof for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax imposed by Section 55 of the Code; (ii) an interest in a regulated investment company to the extent that at least ninety-five percent of the income to the holder of the interest is interest that is excludable from gross income under Section 103 of the Code of any owner thereof for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax imposed by Section 55 of the Code; and (iii) certificates of indebtedness issued by the United States Treasury pursuant to the Demand Deposit State and Local Government Series program described in 31 C.F.R. part 344 (to the extent permitted by law). "Project" means the eligible capital improvements of the water or wastewater systems of the Recipient financed with the Loan. Qualified Small Issuer" means a municipality, water district, sanitary district, or other unit of local government if (a) it is a governmental unit that has the power (without obtaining non-ministerial approval of any other governmental unit) to impose a tax of general applicability that, when collected may be used for the governmental purposes of the Recipient. A tax of general applicability is one that is not limited to a small number of persons; (b) it is not subject to the control of any alter governmental unit; (c) 95% or more of the Loan Proceeds actually borrowed by it have been and will be used for local governmental activities; and (d)Neither it nor any entity that issue tax exempt bonds on its behalf nor any entity under its control has issued or will issue during Calendar year 2002 and during each calendar year during which the Loan has been or is funded, more than $5,000,000 aggregate face amount of tax exempt bonds (excluding qualified private activity bonds) reduced by the commitment amount of the Loan. For purposes of this test if any such tax-exempt bonds are sold with original issue premium in excess of 2%, the issue price of those bonds is used in place of aggregate face amount. "Recipient" is defined in the preamble. "Related Person" means a member of the same controlled group. "Repayment Fund" means the fund or account (or funds or account) maintained by the Recipient to hold revenues (possibly including tax or utility revenues) pending use to pay principal of or interest on IEPA Loans. B-2 ©CHAPMAN AND CUTLER APRIL,2001 (VERNM.01) "Restricted Funds" means any funds or accounts (or any other formal or informal collection of money or investments) relating to any of the Recipient's IEPA Loans, including any debt service reserve fund pledged to any IEPA Loans that (i) are reasonably expected by the Recipient to be used to pay principal of or interest on any IEPA Loans, (ii) are so restricted or earmarked so as to assure availability to pay principal of or interest on any of the Recipient's IEPA Loans in the event that other moneys prove insufficient, or (iii) have a sufficiently direct relationship to the Recipient's IEPA Loans to conclude that the amounts in such funds or accounts would have been used for the governmental purpose of any of such IEPA Loans if the proceeds of such IEPA Loan had not been used for that purpose, those other funds or accounts may be subject to investment restrictions and rebate as described in Appendix A. Such restrictions may also apply if the Recipient has entered into (at any time) any covenants to maintain balances in any funds or accounts for the benefit of holders of its debt or guarantors thereof. "Trustee" means Amalgamated Bank of Chicago. "Yield" means that discount rate which when used in computing the present value of all payments of principal and interest paid and to be paid on an obligation (using semiannual compounding on the basis of a 360-day year) produces an amount equal to the obligation's purchase price (or in the case of the Bonds, the issue price as established in Section 5.1), including accrued interest. B-3 0 CHAPMAN AND CUTLER,APRIL,2001 (VERNM.01) APPENDIX C If none: indicate "none" I. Name of Fund or Account: NO N& Description of function or purpose: Approximate current balance: $ Indicate if this fund or account is expected to be depleted at least once each year: Indicate if expected to pay debt service on the Loan or Existing Loans Partially Allocable _ II. Name of Fund or Account: Description of function or purpose: Approximate current balance: $ Indicate if this fund or account is expected to be depleted at least once each year: _ Indicate if expected to pay debt service on the Loan or Existing Loans _ Partially Allocable III. Name of Fund or Account: Description of function or purpose: Approximate current balance: $ Indicate if this fund or account is expected to be depleted at least once each year: _ Indicate if expected to pay debt service on the Loan or Existing Loans Partially Allocable C-1 0 CHAPMAN AND CUTLER,APR[.,2001(VERNM.01) ILLINOIS ENVIRONMENTAL PROTECTION AGENCY 1 021 NORTH GRAND AVENUE EAST, P.O. Box 19276, SPRINGFIELD, ILLINOIS 62794-9276 RENEE CIPRIANO, DIRECTOR 217/782-2027 JUN 2 5 2002 Honorable Arthur F. Prochaska, Jr. Mayor, United City of the Village of Yorkville 800 Game Farm Road Yorkville, IL 60560-1133 Re: Illinois EPA-New Required Tax Certification Dear Mayor Prochaska: The Illinois Environmental Protection Agency ("Agency") is in the process of leveraging the State's Water Revolving Fund loan programs. That means that the State will sell tax-exempt bonds and use the proceeds from the bonds to fund drinking water and wastewater projects. Repayments from loan projects will be used to retire the bonds. The benefit to both you and the program is that the current amount of money available to fund projects will be significantly increased. At least 20 other states are already using this method to maximize available fining. Implementation of a leveraged loan program will not significantly alter the application and disbursement process for the loan program, but it requires that you sign an additional certificate. The required certificate is a Tax Exemption Certificate and Agreement ("Certificate"). The Certificate is needed to ensure that both the Agency and the loan recipient are in compliance with Internal Revenue Service tax laws and regulations concerning the use of proceeds from the sale of tax-exempt bonds. Attached is a copy of the Certificate, which requires your signature. Generally speaking, the certificate is an acknowledgement by you that the funds will not be used for private uses and imposes certain investment restrictions on the interest earnings from any restricted funds dedicated to repay the loan. Certifications of this type are required when tax- exempt bonds are sold. This Certificate has been drafted by outside bond counsel. This Certificate must be completed, signed and returned to the Agency prior to July 12, 2002. The Certificate must be returned prior to the processing of any additional disbursements on your loans. The form and format of the certificate may not be altered in any way. However, in the event that you have more loans to identify than there is available space on the Certificate, please add those loan numbers to the Certificate. GEORGE H. RYAN, GOVERNOR PRINTED ON RECYCLED PAPER Questions concerning the legal significance of the Certificate should be directed to Ronald Schallawitz, Division of Legal Counsel at (217) 782-5544. Comments and questions concerning the leveraging program can be directed to Bob Richardson or me at(217) 782-2027. Sincerely, Ronald P. Drainer, Manager Infrastructure Financial Assistance Section Bureau of Water Enclosure(s) cc: Clerk, United City of the Village of Yorkville Cons. Engr., Jim Leinicke i I y