01-26-15 Agenda, Packet and Committee Meeting Notice

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LITIGATION To the best of the knowledge of the City, there is not now any pending or threatened litigation restraining or enjoining the issuance, sale, execution or delivery of the Bonds or in any way contesting, questioning or affecting the validity of the Bonds, or any of the proceedings of the City taken with respect to the issuance or sale thereof, or the collection and application of any moneys or security provided for the payment of the Bonds. LEGAL OPINIONS AND ENFORCEABILITY OF REMEDIES The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by the valid exercise of the constitutional powers of the State and the United States of America and bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Those exceptions would encompass any exercise of federal, State or local police powers (including the police powers of the City and the State), in a manner consistent with the public health and welfare. The enforceability of the Ordinance, in a situation where such enforcement may adversely affect the public health and welfare, may be subject to those police powers. The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions on the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of parties to such transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. The remedies available to the bondholders upon a default under the Ordinance are in many respects dependent upon judicial actions which are often subject to discretion and delay. Enforcement of remedies provided in the Ordinance may be limited by existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code (the federal bankruptcy code) and other laws relating to creditors' rights generally. Under Federal and State environmental laws, certain liens may be imposed on property of the City from time to time, but the City has no reason to believe, under existing law, that any such lien would have priority over the lien on the CEDIT Revenues pledged to the owners of the Bonds. TAX MATTERS (To be provided by Bond Counsel) ORIGINAL ISSUE DISCOUNT For federal income tax purposes, the Bonds maturing on through and including (the "Discount Bonds ") will be considered to have "original issue discount" equal to the difference between their respective original issue price and the amount payable upon their respective maturities. The original issue price of each Discount Bond will be the initial offering price to the public at which a substantial amount of such Discount Bonds are sold, and the issue date will be the date on which such Discount Bonds are first issued to the public. Under existing law, the original issue discount on a Discount Bond accrued in the hands of a holder is treated for federal income tax purposes as interest which is excludable pursuant to Section 103 of the Code from gross income, assuming compliance by the City with the Tax Covenants. The lQ