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Under the Evans Park Loan Agreement, Evans Park will agree to make or <br />cause to be made payment sufficient to provide for payment in full of all <br />principal of, premium, if any, and interest on the Evans Park Loan when due. <br />Additional security may be provided for the Bonds as determined by the <br />original purchasers of the Bonds, including loan agreements and security <br />agreements from the other Borrowers. Of the $10,000,000 aggregate principal <br />amount of Bonds to be issued under the Joint Powers Agreement, the amount <br />of the Evans Park Loan is to be not in excess of $4,000,000. It is anticipated <br />that the timetable for the financing will be carried out on an expedited basis <br />and be concluded by not later than the end of the current calendar year. This <br />Program is contemplated to be undertaken pursuant to Section 462C.05, subd. <br />4, of the Act and, therefore, it is contemplated that there shall be no specific <br />limitation on the gross income of the occupants. Program requirements as to <br />the Facilities are to be monitored by the City or private parties, as will be <br />provided in the applicable agreements to be entered into in connection with the <br />issuance of the Bonds. <br /> <br /> 3. Need for the Program. This Program is needed as a means of <br />implementing the City's stated housing goals, as provided in the Act and the <br />City's Comprehensive Plan. The Comprehensive Plan recognizes and is <br />consistent with a goal of maintaining and improving the number of units of <br />affordable housing for elderly persons and families in the City. Finally, the <br />City believes that accomplishment of its housing goals should occur through <br />private development, supported by government financing programs. By virtue <br />of issuing the bonds and providing financing for the Facilities, the City will be <br />assisting in the improvement of and the reduction of the overall costs of <br />operating the Facilities. <br /> <br /> 4. Description of Facilities. The Facilities, which are to be the <br />subject of the proposed financing, consist of approximately 20 units of rental <br />housing facilities for seniors to be developed and to be located at Joplin Street <br />and US Highway 10, in the City (the "Facilities"). The Facilities will be owned <br />by Evans Park, Inc., a Minnesota nonprofit corporation (referred to herein as <br />the "Borrower"). It is anticipated that the proceeds of the bonds may also be <br />used, in part, to pay for certain costs of issuance of the Bonds, to the extent <br />such costs are reasonable and are within an amount equal to 2.00% of the <br />proceeds of the Bonds, and to fund necessary reserves, including a debt service <br />reserve fund. Issuance costs in excess of available bond proceeds are to be paid <br />for by the Participating Borrowers from funds other than proceeds of the <br />Bonds. <br /> <br />E-2 <br /> <br /> <br />