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will be passed upon for the County by Michael Hansen, County Counsel, for the Trustee by its counsel, , and for the Underwriters by Preston Gates & Ellis, Counsel to the Underwriters. TAX EXEMPTION In the opinion of Stoel Rives LLP, Special Tax Counsel to the County, under existing laws, court decisions, rulings and regulations and subject to certain exceptions described herein: (i) assuming continuing compliance by the County with its covenants relating to the federal tax-exempt status of the interest components of the 1998 Financing Payments (herein called the "Tax Covenants"), under Section 103 of the Intemal Revenue Code of 1986, as amended, the interest components of each 1998 Financing Payment paid by the County pursuant to the Agreement and received by the Owners of the 1998 Certificates is not includable for federal income taac purposes in the gross incomes of the registered Owners of the 1998 Certificates; and (ii) such interest is exempt from present personal income taxes imposed by the State of Oregon. A copy of the form of opinion to be rendered by Special Tax Counsel is included as Appendix B to this Official Statement. If the County fails to comply with the Ta~c Covenants, the interest components evidenced by the Certificates could become includable for federal income taac purposes in the gross income of the Owners thereof, which includability in gross income could be retroactive to the date of issuance of the Certificates. Special Tax Counsel has not been engaged to, and will not undertake to, monitor the County's compliance with the Tax Covenants or to inform any person as to whether the Tax Covenants are being complied with; nor has Special Ta.r Counse! undertaken to determine or to info~m any person whether any actions taken or not taken, or events occurring or not occurring, after the date of the issuance of the Certificates may affect the federa! taz- exempt status of the interest on the Certiftcates. No Opinion on Tax Status of Interest Components After Nonappropriation Event There can be no assurance that any interest components paid to the Owners of the 1998 Certificates following a Nonappropriation Event will be: (1) excludable from the gross incomes of such Owners for federal income tax purposes, or (2) exempt from personal income taxes imposed by the State of Oregon. T'he opinion of Special Tax Counsel to be rendered in connection with the execution and delivery of the 1998 Certificates expressly excludes any opinion on the tax status of any interest components paid to the Owners of the 1998 Certificates following a Nonappropriation Event. Subsequent Opinions of Other Special Tax Counsel Certain terms, requirements and procedures contained or refened to in the Agreement and other relevant documents may be changed and certain actions may be taken under the circumstances and subject to the terms and conditions set forth in such documents. Stoel Rives LLP expresses no opinion as to any 1998 Certificate or the interest components evidenced by the 1998 Certificates if any such change occurs or action is taken upon the advice or approval of Special Tax Counsel other than Stoel Rives LLP. 1998 Certificates Not Designated Qualified Tax-Exempt Obligations The 1998 Certificates have not been designated as "qualified tax-exempt obligations" within the meaning of Section 265 of the Code. As a consequence, Special Ta~c Counsel observes that, under the existing provisions of the Code, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code) no deduction will be allowed for purposes of federal income taxation for that portion of such financial institutions' interest expense allocable to the interest components evidenced by the 1998 Certificates. ~ 52