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exceed $45,000,000 and loan the proceeds thereof to the Company to finance the housing and health care program described above. D. Each of the Municipalitieswill receive substantial benefit from the Project which will provide additional elderly multifamily housing and health care facilities within the meaning of the Act, accessible and available to residents of each of the Municipalities. The Project will also include additional facilities for health, wellness, congregate dining and other services particularly needed by the elderly in a location convenient to each of the Municipalities. E. In order to assist in the marketing of the Notes to investors at the lowest possible yield thereby enhancing the financial feasibility of the Project, each Municipality wishes to facilitate the designation of the Notes as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended (the "Code"). F. None of the Municipalities has issued during calendar year 2004 nor expects to issue during calendar year 2004 any governmental bonds or qualified 501(c)(3) bonds within the meaning of Section 265(b) of the Code or any other obligations that need to be taken into account in determining whether such Municipality is a"qualified small issuer" within the meaning of Section 265(b) of the Code in excess of $10,000,000. NOW THEREFORE, in consideration of the mutual undertakings and covenants set forth below and other good and valuable consideration, the Municipalities hereby represent and agree as follows: L The Municipalities hereby agree to jointly finance the Project and the housing and health care program described above. North Oaks is hereby designated as the 'issuer of any Notes to be issued pursuant to this Agreement. 2. Each Municipality represents to the other parties hereto that it has adopted a resolution (i) reciting the benefits to such Municipality from issuance of the Notes issued to finance the Project, (ii) authorizing execution, delivery and performance of this Agreement, and (iii) designating $10,000,000 for North Oaks, $7,000,000 for White Bear, $10,000,000 for Bayport and $8,000,000 for Roseville of the Notes as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3)(B) of the Code. 3. North Oaks shall exercise the powers of the Act and Section 265(b) of the Code by adopting, approving and executing such resolutions, documents, and agreements as shall be necessary or convenient to authorize, issue, and sell the Notes and such other resolutions, documents, and agreements as shall be necessary or required in connection with the issuance of the Notes and giving effect to or carrying out the provisions of this Agreement and documents under which the Notes are issued and/or secured. 4. Any Notes to be issued pursuant to this Agreement shall be special, limited obligations of North Oaks, payable solely from proceeds, revenues and other amounts specifically pledged thereto. In no event shall the Notes ever be payable from or charged upon the general credit, taxing powers or any funds of any of the Municipalities;the Municipalitiesare not subject to any liability thereon; no owners of the Notes shall ever have the right to compel the exercise of the taxing power of any of the Municipalities to pay any of the Notes or the ��