7.   Section  86  of  the  Code  requires   recipients  of
certain Social Security and certain Railroad Retirement benefits to
take into account, in determining the taxability of such benefits,
receipts or accruals of interest on the Series L Bonds.

          The Board reserves the right to amend the Resolution
authorizing these Series L Bonds without obtaining the consent of
the owners of the Bonds (i) to whatever extent shall, in the
opinion of Bond Counsel, be deemed necessary to assure that inter-
est on the Series L Bonds shall be exempt from Federal income
taxation, and (ii) to whatever extent shall be permissible (without
jeopardizing such tax exemption or the security of the owners of
the Series L Bonds) to eliminate or reduce any restrictions con-
cerning the Project, the investment of the proceeds of the Series L
Bonds, or the application of such proceeds or of the revenues of
the Project.   The purchasers of the Series L Bonds are deemed to
have relied fully upon these covenants and undertakings on the part
of the Board as part of the consideration for the purchase of the
Series L Bonds. To the extent that the Board obtains an opinion of
nationally recognized bond counsel to the effect that non-
compliance with any of the covenants contained in this Resolution
or referred to in this Resolution would not subject interest on the
Series L Bonds to Federal income taxes or Kentucky income taxes,
the Board shall not be required to comply with such covenants or
requirements.

          Bond Counsel will render the customary opinion as to
exemption of principal of the Bonds from Kentucky ad valorem
taxation and as to exemption of interest on the Bonds from Federal
and Kentucky income taxation, based on the assumption by Bond
Counsel that the Board complies with covenants made by the Board
with respect to compliance with the provisions of the Code, subject
to the exceptions set out above, and based on the assumption of
compliance by the Board with requirements as to any required rebate
(and reports with reference thereto) to the United States of
America of certain investment earnings on the proceeds of the
Series L Bonds.  Bond Counsel are of the opinion that, based on the
foregoing assumption of compliance, the Bonds are not "arbitrage
bonds" within the meaning of Section 148 of the Code.

           Bond Counsel has reviewed the Official Statement with
regard to all matters pertaining to the legality and tax exemption
of the Series L Bonds, including statements concerning the Board
and the purpose and security of the Series L Bonds; but Bond
Counsel has not reviewed the financial data concerning the Board
and the University in the Official Statement, and expresses no
opinion thereon and assumes no responsibility in connection there-
with.

           Subject to the matters set out above, the Series L Bonds
are offered for sale on the basis of the principal of said Bonds
not being subject to Kentucky ad valorem taxation and on the basis
of the interest on said Bonds not being subject to Federal or



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