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? Exhibit 3 -Page 2 of 3 ' -2- It is recommended that the application be given conditional approval for the following reason: j The applicant intends to use either Arter and Hadden or Chapman and Cutler as Bond Counsel, however, at this date, I have received only an informal opinion from Arter and Hadden that the project as conceived is within the provisions of the industrial development bonds tax legislation, even though the project is within the permitted uses of industrial development revenue bonds, as set forth in Chapter 165 of the Revised Code of Ohio. The conditional approval is subject to the following: l. The bond issue will be in the fonn of a loan agreement for a period of approximately thirty years. The bonds will be secured by a first mortgage on the land and building and a first security interest on any equipment to be purchased with the proceeds of the loan. 2. The bonds will be privately placed in accordance with the letter of the Chemical Mortgage Company, dated October 30, 1981, and accepted by the new partnership. 3. The bonds are subject to the unqualified approving legal opinion of Arter and Hadden, Cleveland, Ohio, or Chapman and Cutler, Chicago, Illinois, as set forth as follows: (a) As to the validity of the bond issue under the laws, regulations, rulings and judicial decisions existing as of the date of the issue, the interest on the Bonds is exempt from federal income tax, so long as the limitation upon capital expenditures imposed by Section 103(b) (6) (D) of the Internal Revenue Code of 1954 as amended (the "Code"), is not exceeded, except that the interest on the Bonds at any time during which they are held by a"substantial user" of the Project or is "related person" thereof, as those tenns are used in Section 103(b) (8) of the Code, are not so exempt for the period they are so held; and Under the laws of the State of Ohio, the interest on the Project Bonds, so long as exempt from Federal Zn- come Tax, is exempt from the Ohio Personal Income Tax, Ohio Municipal Income Taxes and from the Income base used in calculating the Ohio Corporate Franchise Tax but the Project Bonds are subject to the Ohio Zntangible Property Tax to the same extent and in the same manner as other obligations not specifically exempted, and the proceeds of the bond issue is for uses permitted under Chapter 165 of the Revised Code in Ohio. The opinion to be submitted to the Community Improvement Corporation and the City for advance approval, prior to closing.