14-20 Cedar Glen Bond Ordinance Addendums

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TAX MATTERS Opinion of Bond Counsel In the opinion of Faegre Drinker Biddle & Reath LLP, Bond Counsel, under existing law and assuming continuing compliance by the Issuer and Borrower with certain tax covenants, interest on the Bonds is excludable from gross income for federal income tax purposes under Section 103 of the Code, except for interest on any Bond for any period during which such Bond is held by a person who is a "substantial user" of the Project or a "related person" within the meaning of Section 147(a) of the Code. Further, under existing law, interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals under the Code. In rendering its opinion, Bond Counsel has relied on certain representations, certifications of fact, and statements of reasonable expectations made by the Issuer, the Borrower, and others, in connection with the Bonds, and Bond Counsel has assumed compliance by the Issuer and the Borrower with certain ongoing covenants to comply with applicable requirements of the Code to assure the exclusion of interest on the Bonds from gross income under Section 103 of the Code. In the opinion of Bond Counsel,under existing law, interest on the Bonds is exempt from taxation in the State of Indiana for all purposes except for the Indiana financial institutions tax. The Code imposes certain requirements that must be met subsequent to the issuance of the Bonds as a condition for the interest on state and local government obligations to be and remain excludable from gross income for federal income tax purposes. The Issuer and the Borrower, respectively, have made in the Indenture, certifications, covenants and representations (collectively, the "Tax Covenants") , the Loan Agreement, the Regulatory Agreement and certain certificates and agreements delivered on the date of delivery of the Bonds that: (i) the Issuer and the Borrower will not to take any action nor fail to take any action, within their respective power and control, with respect to the Bonds, if such action or omission would cause the interest on the Bonds to cease to be excludable from gross income for federal tax purposes pursuant to Section 103 of the Code; (ii) the Issuer and the Borrower will not make any investment or do any other act or thing during the period that the Bonds are outstanding which would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code; and (iii) the Issuer and the Borrower will comply with the arbitrage rebate requirements under Section 148 of the Code to the extent applicable(collectively,the "Tax Covenants"). Noncompliance with such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue, regardless of the date on which noncompliance occurs. Should the Bonds bear interest that is not excluded from gross income for federal income tax purposes, the market value of the Bonds would be materially and adversely affected. Indiana Code 6-5.5 imposes a franchise tax on certain taxpayers (as defined in Indiana Code 6- 5.5)which,in general, include all corporations which are transacting the business of a financial institution in the State. The franchise tax is measured in part by interest excluded from gross income under Section 103 of the Code minus associated expenses disallowed under Section 265 of the Code. Although Bond Counsel will render an opinion in the form attached as APPENDIX A hereto, the accrual or receipt of interest on the Bonds may otherwise affect a Bondholder's federal income tax or state tax liability with respect to the Bonds. The nature and extent of these other tax consequences will depend upon the Bondholder's particular tax status and a Bondholder's other items of income or deduction. Taxpayers who may be affected by such other tax consequences include, without limitation, financial institutions, certain insurance companies, S corporations, certain foreign corporations, individual recipients of Social Security or railroad retirement benefits and taxpayers who may be deemed to have -30-