reconvene regular meeting: 7:00 pm - Irvine Unified School District

consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their
particular circumstances.
The Code imposes various restrictions, conditions and requirements relating to the exclusion from
gross income for federal income tax purposes of interest on obligations such as the Notes represented by
the Note Participations. The Participants have made certain representations and covenanted to comply with
certain restrictions, conditions and requirements designed to ensure that interest on the Notes represented
by the Note Participations will not be included in federal gross income. Inaccuracy of these
representations or failure to comply with these covenants may result in interest on the Notes represented by
the Note Participations being included in gross income for federal income tax purposes, possibly from the
date of original issuance of the Note Participations. The opinion of Bond Counsel with respect to the Note
Participations assumes the accuracy of these representations and compliance with these covenants. Bond
Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not
taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention
after the date of issuance of the Note Participations may adversely affect the value of the Note
Participations, or the tax status of interest on, the Notes represented by the Note Participations.
Accordingly, the opinion of Bond Counsel with respect to the Note Participations is not intended to, and
may not, be relied upon in connection with any such actions, events or matters.
One of the covenants of the Participants referred to above requires each Participant that does not
qualify as a “small governmental issuer” under the Code to reasonably and prudently calculate the amount,
if any, of excess investment earnings on the proceeds of the Note Participations which must be rebated to
the United States, to set aside from lawfully available sources sufficient moneys to pay such amounts and
to otherwise do all things necessary and within its power and authority to assure that interest on the Notes
represented by the Note Participations is excluded from gross income for federal income tax purposes.
Under the Code, if each Participant spends 100 percent of its pro rata share of the proceeds of the Note
Participations within six months after initial delivery, there is no requirement that there be a rebate of
investment profits in order for interest on the Notes represented by the Note Participations to be excluded
from gross income for federal income tax purposes. The Code also provides that such proceeds are not
deemed spent until all other available moneys (less a reasonable working capital reserve) are spent. The
Participants expect to satisfy this expenditure test or, if they fail to do so, to make any required rebate
payment from moneys received or accrued during Fiscal Year 2009-10. To the extent that any rebate
cannot be paid from such moneys, the law of California is unclear as to whether such covenant would
require the Participants to pay any such rebate. This would be an issue only if it were determined that the
Participants’ calculations of expenditures of Note proceeds or of rebatable arbitrage profits, if any, were
incorrect.
Although Bond Counsel is of the opinion that interest on the Notes represented by the Note
Participations is excluded from gross income for federal income tax purposes and is exempt from State of
California personal income taxes, the ownership or disposition of, or the accrual or receipt of such interest
on, the Note Participations may otherwise affect a Beneficial Owner’s federal, state or local tax liability.
The nature and extent of these other tax consequences depends upon the particular tax status of the
Beneficial Owner or the Beneficial Owner’s other items of income or deduction. Bond Counsel expresses
no opinion regarding any such other tax consequences.
Future legislative proposals, if enacted into law, clarification of the Code or court decisions may
cause interest on the Notes represented by the Note Participations to be subject, directly or indirectly, to
federal income taxation, or to be subject to or exempted from state income taxation, or otherwise prevent
Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduction
or enactment of any such future legislative proposals, clarification of the Code or court decisions may also
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