Cleveland Clinic Health System Obligated Group - FMSbonds.com
Cleveland Clinic Health System Obligated Group - FMSbonds.com Cleveland Clinic Health System Obligated Group - FMSbonds.com
October __, 2008Page 2Indenture and the Assignments, each dated as of September 1, 2008. We have also examined acopy of a signed and authenticated Series 2008A Bond.Based on this examination, we are of the opinion that under existing law:1. The Series 2008A Bonds, the Base Lease, the Lease, the Assignments and theBond Indenture are legal, valid, binding and enforceable in accordance with their respectiveterms, except that the binding effect and enforceability thereof are subject to applicablebankruptcy, insolvency, reorganization, moratorium and other laws in effect from time to timeaffecting the rights of creditors generally, and except to the extent that the enforceability thereofmay be limited by the application of general principles of equity and the exercise of judicialdiscretion.2. The Series 2008A Bonds constitute special obligations of the State, and theprincipal of and interest and any premium on the Series 2008A Bonds (collectively, “debtservice”), together with debt service on any other bonds or obligations hereafter issued under theBond Indenture, including supplements thereto, on a parity with the Series 2008A Bonds, arepayable solely from the revenues and other money pledged and assigned by the Bond Indentureand the Assignments to secure that payment, including the payments required to be made by theFoundation under the Lease. The Series 2008A Bonds do not represent or constitute a generalobligation, debt or pledge of the faith and credit, of the State or the Commission, are not securedby an obligation or pledge of any money raised by taxation and do not grant to the holders anyrights to have the State levy any taxes or excises or appropriate funds for the payment of debtservice on the Series 2008A Bonds.3. The interest on the Series 2008A Bonds is excluded from gross income for federalincome tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the“Code”), and is not treated as an item of tax preference under Section 57 of the Code forpurposes of the alternative minimum tax imposed on individuals and corporations. The intereston the Series 2008A Bonds, and any profit made on their sale, exchange or other disposition, areexempt from the Ohio personal income tax, the Ohio commercial activity tax, the net incomebase of the Ohio corporate franchise tax, and municipal, school district and joint economicdevelopment district income taxes in Ohio. We express no opinion as to any other taxconsequences regarding the Series 2008A Bonds.In giving the foregoing opinion with respect to the treatment of interest on the Series2008A Bonds and the status of the Series 2008A Bonds under the tax laws, we have assumed andrelied upon compliance with the covenants of (i) the Members of the Obligated Group and (ii)the Commission, and the accuracy, which we have not independently verified, of therepresentations and certifications of the Members of the Obligated Group and the Commissioncontained in the Transcript. The accuracy of certain of those representations and certifications,and compliance by the Members of the Obligated Group and the Commission with certain ofthose covenants, may be necessary for the interest on the Series 2008A Bonds to be and remainexcluded from gross income for federal income tax purposes and for other tax effects statedabove. Failure to comply with certain of those covenants subsequent to issuance of the SeriesD-2
October __, 2008Page 32008A Bonds could cause interest on the Series 2008A Bonds to be included in gross income forfederal income tax purposes retroactively to the date of issuance of the Series 2008A Bonds.Portions of the interest on the Series 2008A Bonds earned by corporations may besubject to a corporate alternative minimum tax under the Code. In addition, under the Code,interest on the Series 2008A Bonds may be subject to a branch profits tax imposed on certainforeign corporations doing business in the United States and to a tax imposed on excess netpassive income of certain S corporations.In rendering this opinion, we have relied upon certifications and representations offact, contained in the Transcript, which we have not independently verified, and we haveassumed the due authorization, signing and delivery by, and the binding effect upon andenforceability against, (i) the Bond Trustee of the Bond Indenture and the Assignment to theBond Trustee, and (ii) the Master Trustee of the Assignment to the Master Trustee. We havealso relied upon the opinions of Jones Day, special counsel to the Members of the ObligatedGroup, and David W. Rowan, Chief Legal Officer of the Foundation, contained in the Transcript,as to matters concerning the Members of the Obligated Group addressed in those opinions,including without limitation, the due authorization, signing and delivery by, and the bindingeffect upon and enforceability against, the Foundation of the Base Lease and the Lease, and haverelied on the aforementioned opinion of Mr. Rowan as to the status of each of the Members ofthe Obligated Group as a 501(c)(3) organization within the meaning of the Code and exemptfrom federal income tax under Section 501(a) of the Code and as to matters of title to the LeasedPremises. We express no opinion herein with respect to the Master Indenture or any MasterNotes delivered under the Master Indenture as security for the payment of the Series 2008ABonds; and no opinion is expressed herein as to the status of title to, or the creation or priority ofany interest in, the Leased Premises.Respectfully submitted,D-3
- Page 177 and 178: “Bond Indenture” means the Bond
- Page 179 and 180: period of three months from the com
- Page 181 and 182: PROPERTY”, and all improvements,
- Page 183 and 184: direct, express or charitable trust
- Page 185 and 186: Rate Hedge” for purposes of this
- Page 187 and 188: Debt according to a fixed schedule
- Page 189 and 190: “Officer’s Certificate” means
- Page 191 and 192: provided, however, that Series 2008
- Page 193 and 194: (t) liens on money or obligations d
- Page 195 and 196: Project Administrator. In the event
- Page 197 and 198: “Stated Maturity” means, when u
- Page 199 and 200: (b) the Cleveland Clinic, or if the
- Page 201 and 202: (d) the Master Trustee receives an
- Page 203 and 204: (g) the loan of cash or other non-O
- Page 205 and 206: under this caption shall be deemed
- Page 207 and 208: Supplemental Indenture to which suc
- Page 209 and 210: emedy thereunder, unless the Noteho
- Page 211 and 212: purchase or other acquisition or re
- Page 213 and 214: limitation, (A) the Special Funds a
- Page 215 and 216: (b) Default in the payment of the p
- Page 217 and 218: Fund Requirements, in the order of
- Page 219 and 220: (g) to evidence the appointment of
- Page 221 and 222: THE LEASEThe Lease contains various
- Page 223 and 224: (a) Failure by the Cleveland Clinic
- Page 225 and 226: APPENDIX DPROPOSED FORM OF OPINION
- Page 227: PROPOSED TEXT OF LEGAL OPINION OFSQ
October __, 2008Page 32008A Bonds could cause interest on the Series 2008A Bonds to be included in gross in<strong>com</strong>e forfederal in<strong>com</strong>e tax purposes retroactively to the date of issuance of the Series 2008A Bonds.Portions of the interest on the Series 2008A Bonds earned by corporations may besubject to a corporate alternative minimum tax under the Code. In addition, under the Code,interest on the Series 2008A Bonds may be subject to a branch profits tax imposed on certainforeign corporations doing business in the United States and to a tax imposed on excess netpassive in<strong>com</strong>e of certain S corporations.In rendering this opinion, we have relied upon certifications and representations offact, contained in the Transcript, which we have not independently verified, and we haveassumed the due authorization, signing and delivery by, and the binding effect upon andenforceability against, (i) the Bond Trustee of the Bond Indenture and the Assignment to theBond Trustee, and (ii) the Master Trustee of the Assignment to the Master Trustee. We havealso relied upon the opinions of Jones Day, special counsel to the Members of the <strong>Obligated</strong><strong>Group</strong>, and David W. Rowan, Chief Legal Officer of the Foundation, contained in the Transcript,as to matters concerning the Members of the <strong>Obligated</strong> <strong>Group</strong> addressed in those opinions,including without limitation, the due authorization, signing and delivery by, and the bindingeffect upon and enforceability against, the Foundation of the Base Lease and the Lease, and haverelied on the aforementioned opinion of Mr. Rowan as to the status of each of the Members ofthe <strong>Obligated</strong> <strong>Group</strong> as a 501(c)(3) organization within the meaning of the Code and exemptfrom federal in<strong>com</strong>e tax under Section 501(a) of the Code and as to matters of title to the LeasedPremises. We express no opinion herein with respect to the Master Indenture or any MasterNotes delivered under the Master Indenture as security for the payment of the Series 2008ABonds; and no opinion is expressed herein as to the status of title to, or the creation or priority ofany interest in, the Leased Premises.Respectfully submitted,D-3
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