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WHEREAS,the City and Little Canada assigned to the Lender their right,title and interest in and
<br /> to the First Mortgage pursuant to the terms of an Assignment of Mortgage, Security Agreement, Fixture
<br /> Financing Statement and Assignment of Leases and Rents, dated as of January 1, 2012 (the"Assignment
<br /> of First Mortgage"); and
<br /> WHEREAS, construction of the Phase I Project has been completed and the Borrower has
<br /> requested that the City assist in the development of a senior housing facility comprised of forty (40)
<br /> independent-living, rental apartments to be located in two buildings (twenty(20) apartments per
<br /> building), together with necessary common areas and community space (the "Phase 11 Project"), to be
<br /> located at 3200 Lake Johanna Boulevard in the City;and
<br /> WHEREAS, the Borrower has requested that the City issue its Senior Housing Revenue Note
<br /> (Presbyterian Homes of Arden Hills, Inc. Project), Series 2015 (the"Series 2015 Note"or"Note"), in the
<br /> original aggregate principal amount of$10,000,000; and
<br /> WHEREAS, the Series 2015 Note is proposed to be sold to the Lender, under the terms and
<br /> conditions of a Note Purchase Agreement, dated on or after July 1, 2015 (the "Note Purchase
<br /> Agreement"),between the City,the Borrower,and the Lender; and
<br /> WHEREAS, the proceeds derived from the sale of the Series 2015 Note are proposed to be
<br /> loaned to the Borrower under the terms and conditions of a Loan Agreement, dated on or after July 1,
<br /> 2015 (the"Loan Agreement"),between the City and the Borrower; and
<br /> WHEREAS, the interests of the City in the Loan Agreement, including loan repayments to be
<br /> made by Borrower thereunder, are proposed to be assigned (subject to the retention of certain reserved
<br /> rights of the City)to the Lender under the terms of an Assignment of Loan Agreement, dated on or after
<br /> July 1, 2015 (the "Assignment of Loan Agreement"), between the City, the Lender, and the Borrower;
<br /> and
<br /> WHEREAS, the obligations of the Borrower under the terms of the Loan Agreement and the
<br /> Assignment of Loan Agreement will be secured by a Mortgage, Security Agreement, Fixture Financing
<br /> Statement and Assignment of Leases and Rents, dated on or after July 1, 2015 (the "Second Mortgage"),
<br /> from the Borrower in favor of the City, an Assignment of Mortgage, Security Agreement, Fixture
<br /> Financing Statement, and Assignment of Leases and Rents, dated on or after July 1,2015 (the
<br /> "Assignment of Second Mortgage"),from the City in favor of the Lender, and by a Collateral Assignment
<br /> of Contract for Private Development, dated on or after July 1,2015 (the"TIF Assignment"), between the
<br /> City,the Borrower,and the Lender;and
<br /> WHEREAS, in accordance with the terms of an agreement between the Borrower and the Lender,
<br /> the Borrower has requested that the City approve certain amendments to the outstanding Series 2011A
<br /> Note and Series 2012A, in conjunction with the issuance of the Note; and
<br /> WHEREAS, in accordance with the terms of an agreement between the Borrower and the Lender,
<br /> the Borrower has also requested that Little Canada approve certain amendments to the outstanding Series
<br /> 2011B Note and Series 2012B, in conjunction with the issuance of revenue obligations of Little Canada;
<br /> and
<br /> WHEREAS, the City has been advised by Kennedy & Graven, Chartered, as bond counsel to
<br /> the City ("Bond Counsel'), that the proposed amendments to the Notes constitute a significant
<br /> modification to the Prior Notes and will cause a reissuance of the Prior Notes under federal income tax
<br /> -3-
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