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RESOLUTION GIVING APPROVAL TO THE ISSUANCE OF TAX EXEMPT LOAN PARTICIPATION NOTES AND AUTHORIZING EXECUTION OF A JOINT POWERS AND ALLOCATION AGREEMENT RELATING TO BANK QUALIFICATION OF SUCH NOTES (PRESBYTERIAN HOMES OF NORTH OAKS, INC. PROJECT) WHEREAS, Presbyterian Homes of North Oaks, Inc., a Minnesota nonprofit corporation or a related entity (the "Company") intends to undertake a project consisting of: the (i) acquisition of land and site improvements and the construction and equipping of approximately 150 units of senior housing located at 5959 Centerville Road (at the intersection of Centerville Road and County Road J.) in the City of North Oaks, Minnesota ("North Oaks") consisting of 84 units designated as senior independent congregate housing, 66 units designated as assisted living, 72 senior independent housing units designated as "mews" in eight-plex buildings, 22 units designated as skilled nursing care beds, and also includes a wellness/fitness center and child daycare center; (ii) additional site improvements to the Boutwells Landing Continuing Care Retirement Community at the southwest comer of the intersection of Norwich Parkway and Nolan Parkway in the City of Oak Park Heights, Minnesota ("Oak Park Heights"), for general community uses and park facilities; and (iii) acquisition of approximately 22 acres of land in the Town of Baytown, Minnesota, adjacent to the existing Boutwells Landing Continuing Care Retirement Community in Oak Park Heights which will be developed in the future for additional senior housing (the "Project"); and WHEREAS, the Company has proposed that the City of Roseville, Minnesota (the "City"), North Oaks, the Town of White Bear, Minnesota ("White Bear"), the City of Bayport, Minnesota ("Bayport") or another city or cities to be named enter into a joint powers agreement under Minnesota Statutes § 471.59, to jointly issue "bank qualified" tax exempt loan participation notes in the aggregate principal amount of not more than $45,000,000 (the "Notes") to finance the Project pursuant to Minnesota Statutes, Chapter 462C and Section 469.152-1651 (collectively, the "Act"); and WHEREAS, Section 265(b) of the Internal Revenue Code of 1986, as amended (the "Code"); allows a governmental unit such as the City to designate obligations as "qualified tax exempt obligations" even if it is not the issuer of the obligations thereby allocating all or a portion of its "small issuer status" limit of $10,000,000 under Section 265(b) ("bank qualification") of the Code upon the conditions set forth in Section 265(b) of the Code; and WHEREAS, the Notes will be payable solely from revenues of the Company, will not be a general or moral obligation of the City, North Oaks, White Bear, Bayport or any other political subdivision of the State of Minnesota, but will be payable solely from revenues of the Company, to the extent and in the manner provided in the documents executed in connection with the issuance of the Notes; and WHEREAS, the City has not issued, nor expects to issue during calendar year 2004 more than $2,000,000 of governmental bonds or "qualified 501(c)(3) bonds" or any other obligations within the meaning of Section 265(b) of the Code that need to be taken into account in determining whether the City is a "qualified small issuer" within the meaning of Section 265(b) of the Code. 1691421vl