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by the United States from the date of issue. The proposed form of the opinion of Bond Counsel appears as
Appendix B attached hereto.
Bond Counsel’s opinion speaks as of its date, is based on current legal authority and precedent,
covers certain matters not directly addressed by such authority and precedent, and represents Bond
Counsel’s judgment as to the excludability of interest on the Bonds for federal income tax purposes. Bond
Counsel’s opinion does not contain or provide any opinion or assurance regarding the future activities of
the Issuer or the Borrower or about the effect of future changes in the Code, the applicable regulations, or
the interpretation or the enforcement thereof by the Internal Revenue Service (the “IRS”) and the courts.
Although Bond Counsel is of the opinion that interest on the Bonds is excludable from gross income
for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of interest on,
Bonds may otherwise affect the federal tax liability of an owner of the Bonds. The nature and extent of
these other federal tax consequences depend on the owner’s particular tax status and levels of other income
or deductions. Bond Counsel will express no opinion regarding any such other tax consequences and
prospective purchasers of the Bonds should consult their own tax advisors with respect thereto.
Reliance and Assumptions; Effect of Certain Changes
In delivering its opinion regarding the federal tax treatment of interest on the Bonds, Bond Counsel
is relying upon and assuming the accuracy of certifications and representations of the Issuer, the Borrower,
and other persons to facts material to the opinion, which Bond Counsel has not independently verified.
In addition, Bond Counsel is assuming continuing compliance with the Covenants (as hereinafter
defined) by the Issuer and the Borrower. The Code and the regulations promulgated thereunder contain a
number of requirements that must be satisfied after the issuance of the Bonds in order for interest on the
Bonds to be and remain excludable from gross income for purposes of federal income taxation. These
requirements include, by way of example and not limitation, restrictions on the use, expenditure and
investment of the proceeds of the Bonds and the use of the property financed by the Bonds, limitations on
the source of the payment of and the security for the Bonds, and the obligation to rebate certain excess
earnings on the gross proceeds of the Bonds to the Treasury of the United States (the “Treasury”). The
Indenture, the Loan Agreement, and the Tax Certificate contain covenants (the “Covenants”) under which
the Issuer and the Borrower have agreed to comply. A failure to comply with the Covenants could cause
interest on the Bonds to become includable in gross income for federal income tax purposes retroactively to
their date of issue. If such a failure were to occur, the available enforcement remedies may be limited by
applicable provisions of law and, therefore, may not be adequate to prevent interest on the Bonds from
becoming includable in gross income for federal income tax purposes. Compliance by the Issuer with its
respective Covenants does not require the Issuer to make any financial contribution for which it does not
receive funds from the Borrower.
Bond Counsel has no responsibility to monitor compliance with the Covenants after the date of
issue of the Bonds.
Certain requirements and procedures contained, incorporated or referred to in the Indenture, the
Loan Agreement, and the Tax Certificate, including the Covenants, may be changed and certain actions
may be taken or omitted subject to the terms and conditions set forth in such documents. Bond Counsel
expresses no opinion concerning any effect on the excludability of interest on the Bonds from gross income
for federal income tax purposes of any such subsequent change or action that may be made, taken or omitted
upon the advice or approval of counsel other than Bond Counsel.
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