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2.01. Pursuant to Section 469.154 of the Industrial Development Act, prior to the issuance of the Lauderdale Note by the City, the Commissioner of the Minnesota Department of Employment and Economic Development ("DEED") must approve the new costs of the Project to be funded by the Lauderdale Note on the basis of an application submitted by the City with all required attachments and exhibits (the "DEED Application"). 2.02. There has been presented before this City Council a copy of the DEED Application. In accordance with Section 469.154 of the Industrial Development Act, the City Administrator of the City is hereby authorized and directed to submit the proposal for the new costs of the Project to DEED. The City Administrator and other officers, employees and agents of the City are hereby authorized to provide DEED with any preliminary information needed for this purpose, and the City Administrator is authorized to initiate and assist in the preparation of such documents as may be appropriate to the new costs of the Project, if approved. Section 3. Preliminary Findings. The City Council hereby reaffirms its preliminary findings made in the resolution adopted by the City Council on August 12, 2014. The Lauderdale Note will be a special, limited obligation of the City payable solely from the revenues pledged to the payment thereof, and will not be a general or moral obligation of the City and will not be secured by or payable from revenues derived from any exercise of the taxing powers of the City. Section 4. Preliminary Approvals. 4.01. The City Council hereby states its preliminary intention to issue the Lauderdale Note in the maximum aggregate principal amount of $10,000,000; provided, however, that the new costs of the Proj ect are approved by DEED. Proceeds of the Lauderdale Note are authorized to be.used to provide funds for all, or a portion of, the costs related to (i) financing the acquisition, construction, and equipping the TCU Facility; (ii) refunding the outstanding principal amount of the 2002 Assisted Living Bonds and the 2002 Nursing Home Bonds; (iii) refinancing the Prior Loans; (iv) funding capitalized interest on the Lauderdale Note during the construction of the TCU Facility; (v) funding required reserves for the Lauderdale Note, if any; and (vi) paying the costs of issuing the Lauderdale Note. The issuance of the Lauderdale Note is also subj ect to the mutual agreement of the City, the Borrower, and the initial purchaser of the Lauderdale Note as to the details of the Lauderdale Note and provisions for its payment. 4.02. The Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City except the City's interest in the loan or revenue agreement with respect to the Lauderdale Note and the Project, and the Lauderdale Note, when, as, and if issued, shall recite in substance that the Lauderdale Note, including interest thereon, is payable solely from the revenues received from the Project and property pledged to the payment thereof, and shall not constitute a general or moral obligation of the City. 4.03. The law firm of Kennedy & Graven, Chartered, is authorized to act as Bond Counsel and to assist in the preparation and review of necessary documents relating to the Project and the Lauderdale Note issued in connection therewith. The Mayor, the City 3 449041v1 JAE NIN475-38