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48 <br />Based on the foregoing, as of today and under existing law, we are of the following opinions: <br />1. The Bonds have been duly authorized and issued. The Bonds are legal, valid and binding <br />obligations of the County, enforceable in accordance with their terms. The County's faith and credit <br />are pledged for the payment of principal of and interest on the Bonds, and the County is authorized <br />to levy and collect ad valorem taxes, without restriction as to rate or amount, on all locally taxable <br />property to pay the principal of and interest on the Bonds. <br />2. Our opinion as set forth in paragraph 1 is subject to the effect (a) of bankruptcy, insolvency, <br />reorganization, moratorium and other similar laws affecting creditors' rights, and (b) of general <br />principles of equity, regardless of whether applied in a proceeding in equity or at law. <br />3. Interest on the Bonds paid by the County (a) is not included in gross income for federal in- <br />come tax purposes and (b) is not an item of tax preference for purposes of the federal alternative <br />minimum income tax imposed on individuals and corporations. The County's failure to comply with <br />the Covenants could cause interest on the Bonds to be included in gross income for federal income <br />tax purposes retroactively to the date of issuance of the Bonds. <br />4. Interest on the Bonds is exempt from existing State of North Carolina income taxation. <br />We express no opinion regarding other federal or North Carolina tax consequences of the own- <br />ership of or receipt or accrual of interest on the Bonds. <br />Our services as bond counsel have been limited to rendering the foregoing opinion based on our <br />review of such proceedings and documents as we have deemed necessary to evaluate the legality, <br />validity and enforceability of the Bonds and to evaluate the status of the Bonds and the interest <br />thereon under the federal and North Carolina tax laws referenced above. <br />We have not made any investigation concerning the County's operations or condition. We ex- <br />press no opinion (a) as to the County's ability to provide for payments on the Bonds, (b) as to the ac- <br />curacy, completeness or fairness of any information that may have been relied on by anyone in <br />making a decision to purchase Bonds, including the LGC's Official Statement with respect to the <br />Bonds, or (c) as to any party's compliance with any terms or conditions precedent to any purchase of <br />Bonds. <br />This opinion is based on constitutional and statutory provisions and judicial decisions existing <br />today. We assume no responsibility to update this opinion or take any other action with regard to <br />changes in facts, circumstances or the applicable law. <br />Very truly yours, <br />(To Be Signed, "Sanford Holshouser LLP"] <br />E-2 <br />