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40 ARTICLE V SPECIAL COVENANTS Section 5.01. Tax -Exempt Status of the Bonds. It is the intention of the parties hereto that the interest on the Bonds be and remain exempt from federal income taxation and, to that end, the Borrower covenants with the Issuer, the Trustee and each of the holders from time to time of the Bonds that (i) the Borrower shall take any and all action necessary to maintain the exemption from federal income taxation of the interest on the Bonds and (ii) the Borrower shall not perform any act or enter into any agreement, or use or permit the use of the Project or any portion thereof in a manner that shall have the effect of terminating the exemption from federal income taxation of interest on the Bonds. The Borrower shall comply with all provisions of the Tax Certificate and Agreement pertaining to the Bonds executed by the Borrower on the date of execution and delivery hereof (the "Tax Certificate and Agreement") and the representations and covenants contained therein and hereby incorporated into this Loan Agreement by reference. Section 5.02. Bonds Not to Be Arbitrage Bonds. The Borrower covenants that it will not make, or (to the extent it exercises control or direction) permit to be made, any use of the Bond Proceeds that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 and the arbitrage regulations. The Issuer will hold and shall invest Bond Proceeds within its control (if such proceeds are invested) in accordance with the expectations of the Issuer set forth in the Section 148 Certificate of the Issuer pertaining to the Bonds. If the Issuer is of the opinion upon receipt of advice of Bond Counsel that it is necessary further to restrict or limit the yield on the investment of any Bond Proceeds in order to avoid the Bonds being considered "arbitrage bonds" within the meaning of Section 148 or the arbitrage regulations, the Issuer shall take such action as is necessary to restrict or limit the yield on such investment, irrespective of whether the Borrower is of the same or a different opinion. Upon the request of the Borrower and NHC and receipt of advice of Bond Counsel the Issuer may, and upon receipt of an approving ruling from the Internal Revenue Service or a decision of a court of competent jurisdiction the, Issuer shall, take such action as is necessary to remove or modify a restriction or limitation on the yield on the investment of any Bond Proceeds that was formerly deemed necessary; provided that the Issuer shall not hold or invest any Bond Proceeds in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 and the arbitrage regulations. The Issuer shall incur no liability in connection with action as contemplated herein so long as the Issuer acts in good faith. Section 5.03. Borrower to Provide Information. Whenever requested by the Issuer or the Trustee, the Borrower shall provide and certify, at the Borrower's expense, such information concerning the Project, the Borrower, its finances and other topics as the Issuer or the Trustee reasonably considers necessary to enable it to keep Bondholders informed of financial and any other - 16 -