75-88 Sewer Improvement BAN $640,000

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approving legal opinion of Calfee, Halter & Griswold, Bond Counsel, which will be furnished without cost to the original purchaser at the time the Notes are delivered to it. That opinion will include an opinion, based upon and assuming compliance with covenants and the accuracy of representations and certifications of the City, that under the existing law (a) the interest on the 'Notes (i) is excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), (ii) is not treated as an item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations by the Code, and (iii) is exempt from the Ohio personal income tax and excluded from the net income base of the Ohio corporate franchise tax, and (b) the Notes are not "private activity bonds" as defined in the Code. Under the Code, the interest may be subject to alternative minimum, environmental, and branch profits taxes imposed on certain corporations, and to a tax imposed on excess net passive income of certain S corporations. For a more complete discussion of tax aspects, see the enclosed Preliminary Official Statement. The Notes are to be issued in anticipation of bonds for the purpose of constructing and renovating sewer lines .and any necessary appurtenances thereto. The Notes, unless paid from other sources and subject to the provisions of federal bankruptcy law and other laws affecting creditors' rights, are to be paid from the proceeds of the levy of ad valorem taxes on all property subject to ad valorem taxes levied by the City, which taxes are within the ten-mill limitation imposed by law. The Notes will be prepared in typewritten or xerographically reproduced form at the expense of the City. If the original purchaser requests printed Notes, the original Purchaser must pay the expense of printing. Delivery will be made without charge at such place in the State of Ohio as the original purchaser shall designate, provided that other mutual satisfactory arrangements for delivery outside the State of Ohio at the expense of the original purchaser may be made. It is anticipated that delivery will be made approximately on October 14, 1988. The original purchaser must pay for the Notes on the date of delivery in Federal Reserve Funds of the United States of America. The original purchaser agrees to provide to the City and Bond Counsel information as to bona fide initial offering prices to the public and sales of the Notes appropriate for determination of yield on the Notes under the Code, as and at the time requested by Bond Counsel. In the event that, prior to their delivery, the interest on the Notes should by any act of Congress or otherwise become subject to federal income tax, or any act of Congress should provide that the interest income on the Notes shall be taxable at a future date for federal income tax purposes, whether directly or indirectly, the original purchaser may refuse to accept delivery. The City will furnish the transcript of proceedings and a certificate that to the knowledge of the signers no -2-