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(e) As required by the Act and Section I 47(f) of the Internal Revenue Code of 1986, as amended (thc "Code"), the City has, on September 10,2001, held a public hearing on the issuance of the Notes to finance the Project. (f) The issuance and sale by the City of the Health Care Facility Revenue Refunding Note, Series 200lA (Presbyterian Homes Bloomington Care Center, Inc. Project), pursuant to the Industrial Development Act, and thc Housing Facility Revenue Note, Serics 200lB (Presbyterian Homes Bloomington Care Center, Inc. Project) pursuant to the Housing Program Act, (collectively, the "Notes") is in the best interest of the City, and the City hereby determines to issue the Notes and to sell the Notes to Dakota Bank, in Mendota Hcights, Minnesota (the "Lcndcr"), as provided herein. The City will loan the proceeds of the Notes (the "Loan") to the Borrower to finance the Projcct. (g) Pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the City and the Borrower, the Borrower has agreed to repay the Notes in specified amounts and at spccified times sufficicnt to pay in full when due the principal of, premium, if any, and interest on the Notes. In addition, the Loan Agreement contains provisions relating to the acquisition, the maintenance and operation of the Project, indemnillcation, insurance, and other agreements and covenants which are required or permitted by the Act and which the City and the Borrower deem necessary or desirable for the financing of the Project. A draft of the Loan Agrecment has been submitted to the City Council. (h) Pursuant to a Pledge Agreement (the "Pledge Agreement") to be entered into between the City and the Lender, the City has pledged and granted a security interest in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the City Council. (i) Pursuant to a Mortgage, Security Agreement and Fixture Financing Statement to be executed by the Borrower in favor of the Lender (the "Mortgage"), the Borrower has secured payment of amounts due under the Loan Agreement and Notes by granting to the Lender a mortgage and security interest in the property described therein. A draft of the Mortgage has been submitted to the City although the City is not a party to this document. U) As additional security for the Notes the Borrower will deliver to the Lender a Security Agreement (the "Security Agreement"), a Guaranty (the" Guaranty") and an Assignment of Leases and Rents (the "Assignment") and various other agreements and certificates required by the Lender. (k) The Notes will be special limited obligations of the City. The Notes shall not be payable from or charged upon any funds other than the revenues pledgcd to the paymcnt thereof, nor shall the City be subject to any liability thereon. No holder of the Notes shall ever have the right to compel any exercise of the taxing power of the City to pay the Notes or the interest thereon, nor to enforce payment thereof against any property I 320443v2 2