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<br />ac:croed market discount (defined below) of such bonds; although for this purpose, a de minimis amO\Ult of market discount is ignored. A
<br />Rmarket discount bondR is one which is acquired by the owner at a purchase price which is less than the stated redemption price at
<br />maturity or, in the case of a bond issued at an original issue discount, the "revised issue price" (i.e., the issue price plus accrued original
<br />issue discount). The Raccrued market disco\UltR is the amount which bears the same ratio to the market discount as the number of days
<br />during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date.
<br />
<br />State. Local. and Foreilrn Taxes
<br />
<br />Investors should consult their own tax advisors concerning the tax implications resulting from the receipt or accmaI of interest on or the
<br />acquisition, ownership, or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their own
<br />tax advisors regarding the tax consequences unique to investors who are not United States persons.
<br />
<br />Oualified Tax-Exempt Oblie:ations for Financial Institutions
<br />
<br />Section 265(a) of the Code provides, in pertinent part, that interest paid or incurred by a taxpayer, including a Rfinancial institutionR, on
<br />indebtedness incurred or continued to pW"Chase or cany tax-exempt obligations is not deductible by such taxpayer in detennining taxable
<br />income. Section 265(b) of the Code provides an: exception to the disallowance of such deduction for any interest expense paid or
<br />incurred on indebtedness of a taxpayer which is a "fmancial institution" allocable to tax-exempt obligations, other than "specified private
<br />activity bondsR, which are designated by an issuer as RquaIified tax-exempt obligationsR. Section 265(bX5) of the Code defines the term
<br />RfinanciaI institution" as referring to any corporation described in section 585(aX2) of the Code, or any person accepting deposits from
<br />the public in the ordinary course of such person's trade or business which is subject to federal or state supervision as a fmancial
<br />institution.
<br />
<br />The Authority expects to designate the Bonds as Rqua1itied tax-exempt obligationsR within the meaning of section 265(b) of the Code. In
<br />furtherance of that designation, the Authority will covenant to take such action which would assure or to refrain from such action which
<br />would adversely affect the treatment of the Bonds as "qwilitied tax-exempt obligations".
<br />
<br />Potential purchasers should be aware that if the issue price to the public (or, in the case of discount bonds, the amount payable at
<br />maturity) exceeds $10,000,000, then such obligations might fail to satisfy the $10,000,000 limitation and the obligations would not be
<br />RquaIified tax-exempt obligations" .
<br />
<br />LEGAL MATTERS
<br />
<br />Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the approval of the Attorney General of the
<br />State of Texas and the opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., Bond Counsel, whose opinion may be printed on the
<br />Bonds. Akin, Gump, Strauss, Hauer & Feld, L.L.P. was not requested to participate, and did not take part in, the preparation of the
<br />Official Statement except as hereinafter noted, and such finn has not assumed any responsibility with respect thereto or undertaken
<br />independently to verifY any of the infonnation contained herein, except that, in its capacity as Bond Counsel, such fum has reviewed the
<br />information under the captions "DESCRIPTION OF BONDS", "TAX MATTERS", and "LEGAL MATTERS" in the Official
<br />Statement to detemrine whether such infonnation presents a fair and 8CCWllte summary of the provisions of the law and the instruments
<br />described under such captions. The legal fees to be paid to Akin, Gump, Strauss, Hauer & Feld, L.L.P. in connection with the issuance
<br />of the Bonds are contingent on the sale and delivery of the Bonds. .
<br />
<br />The various legal opinions to be delivered concurrently with the delivety of the Bonds express the professional judgment of the attorneys
<br />rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an
<br />insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future perfonnance of the
<br />parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the
<br />transaction.
<br />
<br />RATINGS
<br />
<br />Application for ratings on the Bonds have been made to both Moody's and S&P. The; ratings will be provided by addendum to this
<br />Official Statement as soon as possible after their assignment. An explanation of the significance of the ratings may be obtained from
<br />Moody's and S&P. The ratings reflect only the respective views of Moody's and S&P and the Authority makes no representation as to the
<br />appropriateness of the ratings. There is no assurance that the ratings assigned will continue for any given period of time or that they will
<br />not be changed, suspended or withdrawn by either Moody's or S&P. Any change, suspension or withdrawal of the ratings may have an
<br />effect on the market price of the Bonds.
<br />
<br />BOOK-ENTRY-ONLY SYSTEM
<br />
<br />The Depository Trust Company (RDTCR). New York, New York, will act as securities depository for the Bonds. The Bonds will be
<br />issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered security
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