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447996v2 JAE MN475-38 2 1.04. The City of Minneapolis loaned the proceeds of the 2002 Assisted Living Bonds to Catholic Eldercare Community Services Corporation II, a Minnesota nonprofit corporation and an affiliate of the Borrower, to finance the acquisition, construction, and equipping of a 71-unit assisted living facility located at 2919 Randolph Street NE (commonly known as RiverVillage East) in the City of Minneapolis (the “Assisted Living Facility”). The 2002 Assisted Living Bonds were issued in accordance with the Industrial Development Act. 1.05. The City of Minneapolis loaned the proceeds of the 2002 Nursing Home Bonds to the Borrower, to (i) refinance the acquisition, construction, and equipping of the 150-bed skilled nursing facility located at 900 2nd Street NE (commonly known as Catholic Eldercare on Main) in the City of Minneapolis (the “Skilled Nursing Facility”); and (ii) refinance the acquisition, construction, and equipping of a 51-unit assisted living multifamily rental housing facility located at 909 Main Street NE (commonly known as MainStreet Lodge) in the City of Minneapolis (the “Assisted Living Housing Facility”). The 2002 Nursing Home Bonds were issued in accordance with the Industrial Development Act and the Housing Act, and the City of Minneapolis adopted programs for the facilities financed in accordance with the Housing Act. 1.06. The facilities financed and refinanced with the proceeds of the Notes are referred to herein as the “Facilities.” The Facilities will be owned and operated by individual affiliates of the Borrower. 1.07. Prior to the issuance of the City Note, the City Council of the City must conduct a public hearing to (i) approve the issuance of the City Note pursuant to the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (the “Code”); and (ii) approve the Project pursuant to Section 469.154, subdivision 4 of the Industrial Development Act. Section 2. Preliminary Findings. Based on representations made by the Borrower to the City to date, the City Council of the City hereby makes the following preliminary findings, determinations, and declarations: (a) The Assisted Living Housing Facility, which is being refinanced with proceeds of the Notes, consists of a multifamily housing development designed and intended to be used for rental occupancy by seniors. (b) The proceeds of the City Note will be loaned to the Borrower and the proceeds of the loan will be applied to finance a portion of the Project. The City will enter into a loan agreement (or other revenue agreement) with the Borrower requiring loan repayments from the Borrower in amounts sufficient to repay the loan of the proceeds of the City Note when due and requiring the Borrower to pay all costs of maintaining and insuring the Facilities, including taxes thereon. (c) In preliminarily authorizing the issuance of the City Note and the financing and refinancing of the Project, the City’s purpose is to further the policies of the Housing Act and the Industrial Development Act. (d) The City 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.