3838, 99th Congress, First Session (the "Tax Bill"), has been passed by the
House of Representatives on December 17, 1985, with a provision that many of
its provisions are effective retroactive     to January 1,   1986,  (b) a "Joint
Statement" on the effective dates of pending tax reform legislation (the "Joint
Statement") has been issued by the Chairman and Ranking Members of both the
Wrays and Means Committee of the United States House of Representatives and the
Finance Committee of the United States Senate, together with the Secretary of
the United States Treasury Department, dated March 14, 1986, and (c) it is not
known at present whether such Tax Bill will also be passed by the United States
Senate and approved by the President, the final form in which same will be
enacted, if any, and what retroactive date, if any, will be included in such

           In order to assure purchasers of the Series A Bonds that the Series
A Bonds will continue to be legal obligations and that interest thereon will
continue to be exempt from all Federal and Kentucky income taxation (except
that income from these Bonds may constitute an item of "tax-preference" in the
income of property and casualty insurance companies because of the nature of
the total tax-preference items of such bondowners), the Board covenants to and
with the Owners of the Series A Bonds that (1) the Board will take all actions
necessary to comply with the effective provisions of such Tax Bill, (2) the
Board will take no actions which will violate any of the provisions of such Tax
Bill, (3) none of the proceeds of the Series A Bonds will be used for any
purpose which would cause the interest on the Series A Bonds to become subject
to Federal income taxation, either under the provisions of existing Federal law
or under the new Tax Bill, if enacted and signed into law in the form as same
exists at the time of issuance of the Series A Bonds, if such Tax Bill as
enacted reflects the postponement of effective dates to the extent endorsed in
the Joint Statement, and (4) the Board reserves the right to amend the Series A
Resolution authorizing the Series A Bonds without obtaining the consent of the
Owners of the Series A Bonds (i) to whatever extent shall, in the opinion of
Bond Counsel, be deemed necessary to assure that interest on the Series A 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
bondowners) to eliminate or reduce any restrictions concerning the Series A
Hospital Project, the investment of the proceeds of the Series A Bonds, or the
application of such proceeds or of the Revenues; and the purchasers of the
Series A Bonds are deemed to have relied fully upon these covenants and
undertakings on the part of the Board as part of the consideration for purchase
of the Series A Bonds.

           To the extent that the Board obtains an opinion of Bond Counsel to
the effect that non-compliance would not subject interest on the Series A Bonds
to Federal income taxes or Kentucky income taxes, the Board shall not be
required to comply with the foregoing provisions.


           Section 9.01. Effective Date.

           A certified copy of the Resolution and a certified copy of this
Series A Resolution shall be filed with the Trustee and this Series A