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October __, 1987 <br />Page 4 <br /> <br /> 3. Such proceedings show lawful authority for the <br />execution and delivery of the Certificates under the laws of <br />the State of California now in force and, assuming due <br />authorization, execution and delivery by the Trustee, the <br />Certificates have been duly executed and delivered and are <br />entitled to the benefits of the Trust Agreement. <br /> <br /> 4. The portion of each Base Rental Payment <br />designated as and evidencing and representing interest paid by <br />the City under the Facility Lease and received by the <br />registered owners of the Certificates is excluded from gross <br />income for federal income tax purposes under Section 103 of the <br />Internal Revenue Code of 1986, as amended, and is exempt from <br />State of California personal income taxes. Such interest is <br />not a specific preference item for purposes of the federal <br />individual or corporate alternative minimum taxes, although we <br />observe that it is included in adjusted net book income and <br />adjusted current earnings when calculating corporate <br />alternative minimum taxable income. We express no opinion <br />regarding other federal tax consequences related to the accrual. <br />or receipt of such interest. <br /> <br /> Faithfully yours, <br /> <br /> ORRICK, HERRINGTON & SUTCLIFFE <br /> <br /> Per <br /> <br /> 1606S <br /> <br /> <br />