ALBERTA CAPITAL FINANCE AUTHORITY
RESOLUTION NO. 223
OF THE BOARD OF DIRECTORS

(As Amended November 22, 2007)

(Being a resolution relating to the term and conditions
for lending money to the shareholders of the Authority)

WHEREAS, under the authority of the Alberta Capital Finance Authority Act (the "Act"), the Alberta Capital Finance Authority (the "Authority") has the power to make financing available to its shareholders on the terms and conditions that the Board considers advisable;

NOW THEREFORE IT IS HEREBY RESOLVED AND ENACTED AS A RESOLUTION THAT:

Definitions

1(1) In this resolution:

(a) unless a contrary intention appears, words have the meaning prescribed by the Act;

(b) "President" means the President of the Authority

(c) "penalty" means two, three or four months of interest as defined in Section 8(1) of this resolution; and

(d) "stop-loss settlement" means the present value of the interest loss to the Authority over the remaining term to the maturity of the loan as calculated by the President by and on behalf of the Authority.

2(1) Applications for loans by all shareholders shall have the following documents attached:

(a) an application for a loan in the form prescribed by the President signed by a duly authorized officer of the applicant;

(b) a certified copy of a by-law or resolution enacted by the applicant authorizing the proposed borrowing; and

(c) for applicants under the Municipal Government Act:

i) a copy of the financial information return prepared pursuant to Section 277 of the Municipal Government Act (file one per year);

ii) a copy of the latest audited financial statement (file one per year); and

iii) a copy of the debt limit worksheet (municipalities with a credit rating of “A” or better are exempt).

d) for applicants under the School Act:

i) evidence establishing the approval of the Minister of Learning.

e) for applicants under the Post Secondary Learning Act:

i) the Order in Council approving the borrowing.

f) for applicants under the Alberta Regional Airport Authorities Act:

i) a draw request for a loan in accordance with the provisions, if any, in the applicable loan agreement signed by a duly authorized officer of the Regional Airport Authority; and

ii) in respect of the initial draw request, a certified copy of a resolution passed by the Board of the Regional Airport Authority authorizing the proposed borrowing.

g) any other documentation or information as may be required from time to time by the President.

2(2) An application shall be made for each project authorized by a by-law or resolution of the applicant or, in the case of an Regional Airport Authority, a separate draw request shall be made for each draw request under any applicable loan agreement.

3(1) The term for loans for various types of capital expenditures and the refinancing of external loans for capital expenditures shall be such as is acceptable to the President for and on behalf of the Authority for terms up to 40-years up to but not exceeding the life of the capital project.

3(2) Section 3(1) does not apply to capital expenditures by a Regional Airport Authority. The term of loans to a Regional Airport Authority or other types of loans for capital expenditures not provided for in section 3(1) above shall be as established by the Board from time to time.

4(1) Subject to the power of the Board to establish terms for loans for capital expenditures under section 3(2), the President for and on behalf of the Authority may approve loan applications made by shareholders except as noted in Resolution No. 211.

5(1) Loans will be issued quarterly around March 15, June 15, September 15 and December 15 depending upon market conditions. Borrowers will be required to commit 30-days in advance of the quarterly date above.

6(1) The rate of interest the Authority may charge for loans shall be based on a blended rate basis as determined by the President aggregated on the Authority’s cost of borrowing money (legal and commission costs), its operating costs, both of which shall be as determined by the President, and the impact of repayment structure and term of the loan. The President shall report to each meeting of the Board the interest rates for loans since the last meeting of the Board.

6(2) For loans made after January 1, 2004, a borrower may elect to select a specific date when the rate can be reset that is different from the amortization period. This ability may affect the rate charged on the loan.

7(1) Debentures issued and sold to the Authority by a borrower as security for a loan shall provide for the semi-annual equal payments including principal and interest, unless the President approves repayment on a different term. Any cost associated with repayments on a different term will be included in the determination of the interest rate charged. Repayment on loans made prior to December 31, 2003 will remain as currently established.

8(1) The President shall report to each meeting of the Board on the loans made since the last meeting of the Board and for each loan shall provide:

(a) the name of the borrower;

(b) the amount and purpose for which the loan was made;

(c) the term of the loan;

(d) the interest rate; and

(e) any other information the Board may require.

9(1) For loans made prior to December 31, 2003, with the approval of the President, a borrower may repay a loan in part or in full, or may obtain a reduction of the original loan term, or both, at any time prior to the maturity date of the loan if the borrower pays the lesser of a “stop-loss” settlement or a penalty determined as follows:

• 2 months of interest on the amount of the loan prepaid or reduced in term if the unexpired term or the reduction of the term of the original loan is less than 5 years;
• 3 months of interest on the amount of the loan prepaid or reduced in term if the unexpired term or the reduction of the term of the original loan is 5 years but less than 10 years; and
• 4 months of interest on the amount of the loan prepaid or reduced in term if the term of the original loan prepaid or the reduction of the term is 10 years or more.

Each shareholder can make cumulative prepayments, and/or reductions in term, commencing January 1, 1987 under the penalty provision of not more than 7.5 per cent of its debt owing to the Authority as at December 31, 2003 less any future payments of principal related to that debt. Prepayment made under Section 8(4) of this resolution, and term extensions are not considered as forming part of this limitation. Prepayments plus reductions in term in excess of this limit and prepayments made with funds borrowed from any source, shall be subject to the full “stop-loss” settlement.

9(2) For all loans made after January 1, 2004, all prepayments or extensions of terms will be made on a full stop-loss settlement basis which includes costs related to the termination of the related swap.

9(3) With the approval of the President, a borrower may obtain an extension in term to debentures made prior to December 31, 2003, at any time prior to the maturity date of a loan provided the borrower pays the difference between the rate on the existing loan and the rate that would have been charged for the longer term at the time the loan was made, as calculated by the President by and on behalf of the Authority and, provided that the borrower pays the higher rate for the balance of the term of the re-written loan.

9(4) With the approval of the President, special assessment local improvement debentures made before December 31, 2003 which are a direct charge on the property of ratepayers may be prepaid provided the funds used for the prepayment have, in turn, been prepaid to the municipality by the taxpayers involved in the special assessment levy without penalty. Prepayment of special assessment local improvement loans made after January 1, 2004 will be subject to the full stop-loss settlement which can be passed on to the ratepayer.

9(5) Any request for:

(a) prepayment prior to maturity of a loan; or

(b) the reduction or extension of the original loan term

which is not approved by the President shall be referred to the Board for its decision at the next meeting of the Board.

9(6) The President shall report to each meeting of the Board on prepayments and changes in the term of loans made since the last meeting of the Board noting penalty assessed in each case.

9(7) On application to it by a borrower, the Board may, at its sole discretion, exempt that borrower from the requirement to pay the “stop-loss” settlement or penalty assessed for a specific loan.

10(1) This resolution replaces By-law Nos. 204 and 206 and is to take effect on November 22, 2007.

CERTIFICATE

I, Jacqueline Hui, Corporate Secretary of the Alberta Capital Finance Authority, do hereby certify under the seal of the Authority that the foregoing is a true copy of Resolution No. 223 (As Amended) of the Authority and that the amended resolution was passed at a meeting of the Board of Directors of the Authority duly called and held on the 22nd day of November 2007 at which a quorum of the Directors was present and voted in favour of the resolution.

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