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or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect
the marketability or market value of the Bonds.
Opinion of Bond Counsel – Virginia Income Tax Consequences
In the opinion of Bond Counsel, under current law, interest on the Bonds is excludable from gross
income for purposes of income taxation by the Commonwealth. Bond Counsel will express no opinion
regarding (i) other tax consequences arising with respect to the Bonds under the laws of the Commonwealth
or (ii) any consequences arising with respect to the Bonds under the tax laws of any state or local jurisdiction
other than the Commonwealth. Prospective purchasers of the Bonds should consult their own tax advisors
regarding such other Virginia tax consequences or the tax status of interest on the Bonds in a particular state
or local jurisdiction other than the Commonwealth.
Changes in Federal and State Tax Law and Regulations
Legislation affecting tax-exempt obligations is regularly considered by the U.S. Congress and
various state legislatures. Such legislation may effect changes in federal or state income tax rates and the
application of federal or state income tax laws (including the substitution of another type of tax), or may
repeal or reduce the benefit of the excludability of interest on the tax-exempt obligations from gross income
for federal or state income tax purposes.
The U.S. Department of the Treasury and the IRS and state regulatory authorities are continuously
drafting regulations to interpret and apply the provisions of the Code and state law and court proceedings
may be filed, the outcome of which could modify the federal or state tax treatment of tax-exempt
obligations.
There can be no assurance that legislation proposed or enacted after the date of issue of the Bonds,
regulatory interpretation of the Code or state laws or actions by a court involving either the Bonds or other
tax-exempt obligations will not have an adverse effect on the Bonds’ federal or state tax status, marketability
or market price or on the economic value of the tax-exempt status of the interest on the Bonds.
Prospective purchasers of the Bonds should consult their own tax advisors regarding the potential
consequences of any such proposed or pending federal or state tax legislation, regulations or litigation, as
to which Bond Counsel expresses no opinion.
LEGAL MATTERS
Legal matters incident to the authorization, issuance and sale of the Bonds and with regard to the
tax-exempt status of the interest thereon (see “TAX MATTERS” herein) are subject to the approving legal
opinion of Williams Mullen, Richmond, Virginia, Bond Counsel. A signed copy of that opinion, dated and
speaking only as of the date of original delivery of the Bonds, will be delivered to the Underwriter at the
time of such original delivery. A copy of such opinion will accompany the Bonds, and a draft of that opinion
is attached hereto as Appendix B.
In rendering its approving opinion, Bond Counsel will rely on certifications and representations of
fact to be contained in the transcript of proceedings which Bond Counsel will not have independently
verified. Certain legal matters will be passed upon for the Underwriter by its counsel, Robinson & Cole
LLP, Washington, D.C., for the Issuer by its counsel, Kaufman & Canoles, P.C., Newport News, Virginia,
and for the Borrower by its counsel, Winthrop & Weinstine, P.A., Minneapolis, Minnesota.
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